Blocking or Embracing the Competition: Discussing the Trade War on the Electric Vehicle Industry from a Global Perspective

This study examines the multifaceted impact of the ongoing US-China trade war on the global electric vehicle (EV) industry, scrutinizing how tariffs, supply chain disruptions, and competitive dynamics have reshaped production costs, market share, and innovation strategies. Utilizing a mixed-methods approach, we conducted quantitative analyses through Multiple Linear Regression (MLR) on data collected from 20 leading EV markets. We complemented these findings with qualitative insights from semi-structured interviews with 15 industry experts. Our analysis reveals that the imposition of tariffs significantly elevates production costs for EV manufacturers, leading to a notable shift in market share from Chinese firms to domestic producers in tariff- imposing countries. Furthermore, the findings illustrate that companies embracing collaborative competition tend to foster higher levels of innovation compared to those adopting protectionist measures. By integrating International Trade Theory and Dynamic Capabilities Theory, this research adds to the existing literature on trade wars and industrial competitiveness, highlighting that while tariffs may offer temporary protections, they hinder long-term innovation and resilience in the EV sector. This study fills a critical gap by providing a comprehensive analysis of the trade war's implications on a global scale, offering strategic recommendations for policymakers and industry stakeholders navigating a rapidly evolving landscape. Jelcodes: F13, L62, O38