Another shot was fired – E24

The future is electric – and full of subsidies and trade barriers.

Today, another shot was fired in what could be a large-scale attack Trade warTrade war“A trade war is a conflict between trading partners, with the aim of protecting each party’s production and trade at the expense of the other.” Source: snl.no .

The European Commission wants Increased customs duties on electric cars coming from ChinaBetween 17 and 38 percent as of next month.

Ironically, the loudest protests came from Germany, led by the German auto industry. Producers are keenly aware of competition, but fear of punitive action by their largest export market has a greater impact.

But the Germans were overrun.

In the rearview mirror, we are witnessing a period of globalization and strong growth in global trade. The idea that trade not only provides financial gain to both parties, but also contributes to peace and harmony, has remained strong. The dream, as I have written about previously, was that when China was invited to join the global economy, the country would also take a step closer to the West politically.

Part of the dream has come true: China has experienced tremendous economic growth, lifted millions out of poverty, and become closely integrated into the global economy.

During the Cold War, trade between the two superpowers of the time, the United States and the Soviet Union, was minimal. While China was until recently the country that sold Mostly goods to USA (in terms of value), and the United States Investing increasingly in China.

The close integration is exemplified by the “American” iPhone, which is developed in the United States but manufactured in China. once again, Until now.

There are several reasons why the possibility of a trade war is increasing.

The first is security policy. Growing tension between the United States and China makes it increasingly difficult to rely on a strategic adversary. The United States introduced a De facto A ban on allowing the Chinese to import key technology related to microchips. In both Washington, D.C., and Brussels, plans are being made to achieve greater independence from China. The main area is minerals and rare earths, in which Norway plays an important role.

Politics is also characterized by a New protectionism New protectionism Protectionism is where a country uses various tools (quotas, customs, etc.) to protect its domestic market or industry from products coming from abroad. Wave. The relatively liberal economies of the West must compete with China's Hybrid economy The state plays a very active role. It is not without reason that the country has gained a reputation for subsidizing industries, driving prices down and then reaping the rewards when competitors go bankrupt.

The European Union explicitly refers to Chinese industrial support as justification for new tariffs.

There is no reason in the European Union, China, or the United States to expect a change in course any time soon. President Joe Biden has maintained the tariffs that Donald Trump imposed on China when he took office. If Trump wins the presidential election this fall, there is every reason to believe that interest rates will rise sharply. Especially for China, but also for Europe and Norway.

No one can win a trade war.

Simply because any action will be met with countermeasures.

It goes to the heart of one of the problems associated with hyperactivity: any alleged competitive advantage can quickly be offset by similar measures taken by others. Or we will be crushed, as all the green industry initiatives in the face of the huge support package provided by the Americans, the IRA, witnessed.

Some may hope that an international organization can come to the rescue. The World Trade Organization, for example. But it's dead, if not as dead as a herring, at least Too sick to go shopping.

We can take comfort in the fact of that Eating ice cream has now become a matter of national security.