BYD, NIO, XPENG, & Zeekr Could Get Big Boost from Trump’s Tariff Circus
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Naturally, Trump’s massive tariffs on Chinese-produced goods is aimed at hurting China and helping the US. However, aside from the basic logic of the tariffs being in serious question, there are typically side effects to all of our actions that we didn’t initially consider, and even more so in complicated, large-scale actions like tariff wars.
There have been the expected responses to Donald Trump’s inane tariffs, such as counter-tariffs. However, one interesting side effect was already bubbling up yesterday. I noticed it far down in an article from The Guardian. “China’s commerce minister, Wang Wentao, has said in talks with his Malaysian counterpart that they are willing to work with Asean trading partners to strengthen coordination,” they reported. “He also spoke to the EU trade and security commissioner on Tuesday, saying China was willing to deepen trade, investment and industrial cooperation, and that China and the EU would immediately restart negotiations on electric vehicles.” (Emphasis added.)
Wow. Boom. The EU worked hard to block Chinese EVs via high tariffs on them, but Trump’s trade war apparently pissed off and unsettled Europe so much that its now open to renegotiating the tariffs put on EVs produced in China. What’s that about “the enemy of my enemy is my friend?” Donald Trump’s insistence on making the US an enemy of the EU appears to be pushing the EU into China’s arms.
Or maybe it’s just that this whole trade war nonsense got some EU leaders thinking about just how counterproductive tariffs are. Maybe they realized that if Chinese EV producers could import EVs more cheaply, that would put pressure on European automakers to compete better, to stop whining about CO2 targets, and to actually sell more EVs. It would definitely raise overall EV adoption rates on the continent.
Anyway, so, ironically, Trump’s crusade against China — and the world as a whole — may end up helping Chinese EV producers like BYD, NIO, XPENG, and Zeekr. The European EV market is huge. If the EU is willing to reduce tariffs on Chinese EVs, BYD, NIO, XPENG, Zeekr, and other companies producing EVs in China could find themselves making many more sales in Europe and growing faster overall.
Don’t worry, though, Trump wouldn’t notice and Fox News wouldn’t report on it. No one can know that EVs are actually rocking it around the world, Tesla is no longer the leader, and Chinese EVs are the most innovative and compelling. That’s sacrilegious!
Of course, it’s possible that restarting negotiations on electric car tariffs won’t lead anywhere. Perhaps they won’t be able to come to a compromise that is more favorable to Chinese EVs and the European consumers who want to buy them. Restarting conversations around this so soon after the regulations took effect is promising, though.
What do you think — is Trump’s trade war going to help get EU tariffs on Chinese EVs lowered, and will companies such as BYD, NIO, XPENG, and Zeekr be the big beneficiaries of that? Or are there others you would highlight?
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