Tariff Hikes on Chinese Electric Vehicles: Impact on Global Automotive Supply Chain Resilience

Abstract

This study examined the impact of the EU's and the US's electric vehicle tariff policies on the resilience of the global automotive supply chain. Using a multiregional computable general equilibrium model, it simulated nine scenarios under three policy settings: conflict escalation, conflict de‐escalation, and third‐party mediation. The results indicated: (i) tariff sanctions imposed by the EU and the US failed to suppress China's automotive output, which instead increased by 0.21 percent to 1.83 percent under conflict escalation scenarios; (ii) conflict escalation scenarios inflicted significant welfare losses globally and impaired supply chain resilience. The resilience losses were particularly pronounced in the US (–0.155) and the EU (–0.147); (iii) cooperative strategies, such as technical standard alignment and foreign direct investment‐driven integration, restored welfare and enhanced resilience across economies. These results affirm the viability of non‐zero‐sum strategies centered on institutional cooperation and technology exchange to mitigate trade tensions and strengthen automotive supply chain resilience.