Sou Hu Cai Jing·2026-01-14 13:18Group 1 - The core issue revolves around the escalating trade tensions between the EU and China, particularly concerning electric vehicles and rare earth materials, with a significant increase in China's rare earth magnet exports to the EU by 21% in one month [1] - The EU initiated an anti-subsidy investigation into Chinese electric vehicles in October 2023, leading to a potential tariff of up to 35.3%, which prompted China to retaliate with investigations into European products [4] - The EU's decision to allow Chinese car manufacturers to raise prices instead of imposing tariffs indicates a strategic retreat, as Chinese electric vehicles are already priced 50% to 100% higher in Europe, yet still see a 91% increase in sales [4][9] Group 2 - The EU's reliance on Chinese rare earth materials, which account for 90% of global processing, poses a significant risk to its green transition and high-end manufacturing if China restricts exports [7] - Internal divisions within the EU regarding tariffs on Chinese electric vehicles highlight the economic implications, with countries like Germany opposing tariffs due to fears of losing access to the Chinese market [8] - The compromise reached between the EU and China reflects a recognition of China's competitive advantage in technology, supply chains, and cost control, leading to a shift towards cooperation rather than confrontation [9]