China Weighs EV & Battery Export Restrictions Amidst Trade Tensions
24 March 2025 · Uncategorized ·
President Trump has repeatedly imposed tariffs on China. According to *The Wall Street Journal*, the Chinese government is considering limiting exports of certain goods, such as electric vehicles (EVs) and batteries to America, in an effort to negotiate with the U.S. and mitigate potential trade impacts; however, this discussion does not indicate a shift from its manufacturing-focused policy.
In the 1980s, Japan implemented voluntary export restraints on cars in response to threatened tariffs by the United States—a move that prevented further tariff increases at the time. During Trump’s first term, China resisted adopting similar measures as Japan; however, facing increased economic pressure from America and domestic vulnerabilities during his second term, Beijing might now consider such actions where deemed advantageous.
Chinese government advisors indicate they are considering limiting exports of certain goods—including EVs and batteries—to reduce higher tariffs or other trade barriers imposed by the U.S. This move could also alleviate criticism that China’s auto industry receives excessive subsidies for exporting products at a loss. Chinese officials suggest this strategy might appeal to Trump, who has expressed openness towards increased Chinese investment in America, potentially leading to favorable conditions and expanded opportunities within these sectors.
The advisors clarify that discussions about limiting exports do not signify an alteration of the manufacturing-centric policy but rather represent Beijing’s negotiation tactics and potential enhancements for its industrial value chain. When Japan first agreed on export restraints in 1981, car sales decreased by approximately eight percent; however, this decline was partially offset by higher prices and Japanese companies establishing factories within America.
Experts caution that China may face difficulties implementing such measures due to the complexity of global supply chains involving countries like Vietnam or Mexico. Additionally, Trump’s desire for increased tariff revenues might render these limitations insufficient incentives. Currently, Beijing remains uncertain about Trump's intentions; he has instructed federal agencies to assess economic relations with China—a process expected to be completed by early April—followed by internal procedures addressing trade issues.
(Please note: The image above is illustrative and sourced from Shutterstock.)
In the 1980s, Japan implemented voluntary export restraints on cars in response to threatened tariffs by the United States—a move that prevented further tariff increases at the time. During Trump’s first term, China resisted adopting similar measures as Japan; however, facing increased economic pressure from America and domestic vulnerabilities during his second term, Beijing might now consider such actions where deemed advantageous.
Chinese government advisors indicate they are considering limiting exports of certain goods—including EVs and batteries—to reduce higher tariffs or other trade barriers imposed by the U.S. This move could also alleviate criticism that China’s auto industry receives excessive subsidies for exporting products at a loss. Chinese officials suggest this strategy might appeal to Trump, who has expressed openness towards increased Chinese investment in America, potentially leading to favorable conditions and expanded opportunities within these sectors.
The advisors clarify that discussions about limiting exports do not signify an alteration of the manufacturing-centric policy but rather represent Beijing’s negotiation tactics and potential enhancements for its industrial value chain. When Japan first agreed on export restraints in 1981, car sales decreased by approximately eight percent; however, this decline was partially offset by higher prices and Japanese companies establishing factories within America.
Experts caution that China may face difficulties implementing such measures due to the complexity of global supply chains involving countries like Vietnam or Mexico. Additionally, Trump’s desire for increased tariff revenues might render these limitations insufficient incentives. Currently, Beijing remains uncertain about Trump's intentions; he has instructed federal agencies to assess economic relations with China—a process expected to be completed by early April—followed by internal procedures addressing trade issues.
(Please note: The image above is illustrative and sourced from Shutterstock.)