Abstract:
Additional EU tariffs on Chinese imports are currently under discussion as a response to the "China Shock 2.0." Their effectiveness, however, depends on the objective they are meant to serve. In an era of global value chains, tariffs can reduce import dependencies only up to a point. They might burden export-oriented industries and are unlikely to reduce trade imbalances. Nor can they substitute for measures to strengthen competitiveness and innovative capacity. This policy brief sets out the trade-offs at stake and argues for coordinated action with allies rather than acting unilaterally.
