Starting on July 4, 2024, the European Union will impose provisional countervailing duties of on average 21 percent on battery electric vehicles (BEVs) imported from China. This decision follows an investigation that found evidence of WTO-incompatible subsidies for Chinese BEVs. The EU is now the last major market to establish new trade barriers against Chinese BEVs. While imports of Chinese vehicles may significantly decrease, the long-term impact on electric vehicle prices is expected to be minimal. It could be particularly advantageous for the EU to now adjust its tariff policies towards other WTO members as well.

Should the EU impose a 20 percent tariff on imports of Chinese electric cars, as speculated, it would have a noticeable impact on bilateral trade and production in Europe. The volume of imported electric cars from China would fall by 25 percent. Converted to the almost 500,000 vehicles imported in 2023, this corresponds to an estimated 125,000 units worth almost 4 billion US dollars. The decline would largely be offset by an increase in production within the EU and a lower volume of EV exports, which would likely mean noticeably higher prices for end consumers. This is shown by simulations by the Kiel Institute.

The tariffs recently imposed by US President Joe Biden on imports from China, particularly electric cars, are unlikely to have any negative trade consequences for Europe. In particular, the number of electric cars imported by the US from China is so small, only 12,000 per year, that a detour to other target markets is practically unnoticeable.

The new free trade agreement in Africa opens up new opportunities for trade within the continent and also for European and especially German companies. The EU has an opportunity to arrest the decline in its relative importance in African trade compared to China. For this to succeed, however, the EU and European companies should support African countries in implementing the free trade area. This is the conclusion of a study conducted by the Kiel Institute for the World Economy.

Russia’s invasion of Ukraine threatens food security in Africa. The supply of grain is likely to deteriorate permanently and become more expensive for many African countries. Should Russian grain exports decrease substantially, for example because the country imposes an export ban, some of the poorest countries would probably face a serious hunger crisis. This is shown by current model calculations by the Kiel Institute.

The war in Ukraine could significantly worsen the supply of cereals used in food production in African countries, making food more expensive if Ukraine ceases to be a grain supplier. The country supplies large quantities of grain to North African states in particular, which other sources of supply could not replace even in the long run. The consequences would also be felt in Germany, albeit far less dramatically. This is shown by current model calculations by the Kiel Institute.