In May 2024, the United States announced it would raise tariffs on Chinese electric vehicles (EVs), solar cells, steel and aluminum to enhance the competitiveness of its domestic industries. Shortly after, the European Union (EU) revealed plans to impose significant import tariffs on EVs from China.

Watch the video above as Straight Arrow News contributor Peter Zeihan explains that if China retaliates, the EU and the U.S. have several ways to respond that could quickly impact key Chinese interests.

Excerpted from Peter’s Aug. 2 “Zeihan on Geopolitics” newsletter:

We’re talking about a different kind of war today — trade wars. Specifically, we’ll be looking at attempts by the U.S. and EU to limit Chinese involvement in their electric vehicle markets.

With 100% tariffs from the U.S. and around 50% from the EU, the Chinese EV industry is being backed into a corner… and its only going to get worse. China’s retaliatory measures are limited by their dependence upon foreign imports and attempts to restrict exports of other materials like gallium have backfired. Heck, the Chinese even tried to slap some tariffs on bacon.

China’s myriad of other issues (demographics, post-COVID decline, low value add, etc.) have only exacerbated the problems brought about by these tariffs. The semiconductor industry is a good example of the inefficiencies in the Chinese system and how reliant on foreign expertise it is.

Don’t get me wrong, China is the world’s manufacturer and that’s no small thing, but its dominance will be challenged by these ever-growing wars on trade.

This video was recorded in June of 2024.