China’s new export licensing system strengthens its control over key rare earth elements, deepening supply chain risks. Although new processing facilities are emerging abroad, they won’t soon offset China’s dominance, prolonging global uncertainty.

China’s rise to dominance in electric vehicles, much like Japan’s earlier challenge to U.S. automakers, has prompted an aggressive American response, including tariffs and industrial policy aimed at countering Beijing. But the past offers a valuable lens for understanding today’s EV race and what may come next.

As one of the United States’ closest allies in the West, Canada’s foreign policy tends to generally align with that of the U.S. With anti-China tensions building in both countries, Canada’s latest moves could end up hurting its relationship with China without a more nuanced approach.

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.

As the countries lean more to the left, they may use relations with China to counter the growing radical right movement in the United States and its domino effect in Europe.

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.

Hungary's strategic partnership with China represents a bold pivot aimed at enhancing its geopolitical and economic standing amidst an era of great power competition. But to safeguard itself from geopolitical storms Hungary aims to work within the EU and punch above its weight to catalyze European strategic autonomy.

For a robust Sino-European partnership, Beijing must recognize European interests, particularly the EU's strategic autonomy and security concerns, and address economic competition while fostering collaborative ventures to repair and enhance bilateral relations.

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.