By imposing provisional duties on Chinese EV imports, the EU seeks to protect its automotive industry while navigating complex internal and external pressures, with the potential for significant economic and geopolitical fallout if a full-scale trade war ensues.

After an eight-month investigation, the European Union has announced that it will impose tariffs as high as 38.1% on electric vehicles (EVs) from China to offset the unfair advantages created by Chinese government subsidies. In retaliation, China immediately launched an anti-dumping probe into pork imports from the EU. The two sides are now negotiating a solution to the trade dispute in Beijing.

On June 12, the European Union announced new provisional levies on Chinese electric vehicles (EVs), with the tariff level to be based on estimates of how much state support an EV exporter receives. The new tariffs follow from a months-long investigation into China’s use of financial subsidies, and they will be imposed on top of the 10% tariff that the EU already has in place. They are “provisional” because they might be revised downward if Chinese producers can offer evidence that the support they receive is less than estimated. Separately, if the EU can reach an agreement with China to reduce the volume of Chinese EV exports to Europe, the new tariffs may not be implemented.

Washington’s new strategy may alter its trade dynamics with China, but China cannot be taken out of the picture. Most of America’s trading partners continue to be fed by Chinese supply chains, even as they boost their output of manufactured goods to the United States.

The Biden administration’s new tariffs on Chinese goods are primarily symbolic and political, with negligible economic impact, but they aim to protect and foster the U.S. clean energy supply chain, particularly in the EV sector. However, the tariffs are politically motivated and could undermine industrial policy goals by focusing on geopolitical competition rather than applying uniformly to all countries.

While high officials in the Biden administration — and President Joe Biden himself — have repeatedly proclaimed that America does not seek to decouple from China, the latest move to impose extreme tariffs on certain Chinese goods goes in exactly that direction. It’s a bad idea driven by U.S. election year politics.

Removing import tariffs on Chinese goods could lower consumer prices in the U.S. amid inflation, dissipate the U.S.-China trade war, and support the administration’s overall strategy to strengthen its presence and influence in the Indo-Pacific region.

U.S.-Sino ties plunged during the Trump administration, but the downfall has only intensified since Biden’s presidency. Without concrete policy shifts, the tensions, fueled by defense contractors, translate to arms races and elevated nuclear risks in Asia.

The measures have dismally failed to meet the objectives of the Trump administration, and Biden should lift them immediately. Doing so, with China following suit, will usher in a new period of robust expansion that supports economic recovery on both sides of the Pacific.

Tariffs have ceased to be an effective bargaining chip for the United States as it seeks concessions from China. The effort at compulsion has been a miserable failure as China adapted effectively and U.S. consumers bore the costs. U.S. President Joe Biden should rethink his approach to relations.