the final battle is over the electric car –

Alessio Gallicola

March 29, 2024

China goes on the counterattack once morest the US and EU. The terrain of the conflict is electricity, Ursula von der Leyen’s sanctions and Biden’s plans did not really go down well with Xi Jinping, who this time did not wait for diplomacy and polished the weapons at his disposal. The first step was to appeal to the World Trade Organization once morest what it considers “discriminatory” subsidies by the United States on electric vehicles.

Beijing’s complaint refers to the now famous IRA, the Inflation Reduction Act that the President of the United States proposed to the Americans and which provides benefits of up to 7,500 dollars for those who buy electric cars, provided they were built on US soil . China’s combative face reveals a desire to react also towards Brussels, which through von der Leyen announced the application of customs tariffs once morest electric cars produced by Chinese companies. Beijing appears ready to trigger countermeasures, cutting off European houses from the largest market in the world. China, in fact, has become the leading car exporter, overtaking even Japan and assuming leadership in the electric market, thanks to subsidies paid to producers. Last year, BYD, leader of the sector, matched Tesla’s numbers in terms of sales and is now ready to open a plant in Hungary, with the aim of circumventing the measures envisaged by the EU.

But China’s aggressive policy, in the best tradition of Xi’s management, is also combined with a realpolitik towards the traditional US adversary. Precisely at the same time as the appeal to the WTO, the Chinese leader met representatives of large American companies and universities in Beijing in the Great Hall of the People. The objective is clear, to maintain stable relations with the United States by restoring a climate of trust in their respective economies. To do this, the state communications apparatus came into play, with the Chinese broadcaster CCTV broadcasting a group photo with all the participants, naming them individually.

The internal voices tell of a Xi who did not skimp on exhaustive answers to the questions of the US emissaries, reassuring him of his desire to proceed with a march parallel to the American economy. In short, no to decoupling, and investments in China by US-branded companies are welcome. In practice, the possibility that political tensions between two state powers might give rise to a real war on the ground must be absolutely avoided.