The irrationality of EU tariffs on Chinese EVs

[MILAN] Climate change is, by all accounts, accelerating. Not only are summers getting hotter; extreme weather is becoming increasingly frequent, exemplified by the tropical downpours that have wrought havoc across Europe and the powerful hurricanes hitting the Caribbean and the United States ever-earlier in the year. And yet the European Union, which has long positioned itself as a leader in the fight against climate change, appears to be letting myopic thinking trump sound economic logic.

The EU has shown that it is willing to act on climate change, even when doing so is politically difficult. But in some areas, it is getting in its own way. Consider the ban on sales of new CO2-emitting cars after 2035. It is a bold step, which would reduce emissions by rapidly expanding the market share of electric vehicles (EVs). But it has also been highly controversial, not least because EVs currently cost much more than conventional internal-combustion vehicles.

That need not be the case: China is producing EVs that could cost Europeans half as much as those currently on offer in the EU. Yet, far from welcoming low-cost EVs from China, the EU, in defiance of common sense, recently imposed high tariffs – ranging from 17 per cent to 38 per cent – on them.