The timing of Biden’s recent tariff hike on Chinese Electric Vehicles (EVs) imported to the US could not have been more impeccable. It was meant to send a clear message not only to the US public and manufacturers but also to US allies. Just when Xi was visiting Europe, Washington announced a 100 per cent increase in tariff on Chinese-made EVs. The cost that this increase will add to China is US$18 billion. While this move has supposedly been taken to protect the US domestic manufacturers, this in reality is part of the larger scheme of “de-coupling” from China – a scheme that Biden inherited from the Trump administration and a scheme that Trump, if re-elected, will continue to follow. Even if Biden gets re-elected, “de-coupling” will intensify, as it now is a firm bi-partisan agenda. ,
Its success, however, also depends on the extent of support the US can get from its global allies, especially those in Europe. For some time, Europe has been ambivalent vis-à-vis this policy. It adopted a “de-risking” policy last year, but its impact – and adoption – has been equally ambivalent and unclear. One of the key reasons for this is that Europe is divided vis-à-vis China. Xi’s recent visit to Europe has further exposed these divisions within the continent, showing how difficult it will be to translate the US bi-partisan support for “de-coupling” into transatlantic support.
At the same time, China is also throwing incentives that would make it a lot harder for European states to ignore. At the heart of Washington’s........