EV Trade War Could Spread to Luxury Cars

Europe’s politicians have no easy options for dealing with Chinese electric vehicles.

Slap a 100% tariff on them, as President Biden did last month , and China can easily retaliate against the more than 300,000 luxury cars it gets annually from the European Union. Let Chinese EVs into the EU with the current 10% tariff, though, and Chinese companies have an open road to take market share, given impressive technology and a roughly 30% cost advantage.

This week, the European Commission is expected to announce the results of a nine-month investigation into Chinese EV subsidies . Its most likely course of action is a cautious middle ground—a 25% to 30% tariff that would make European EVs broadly competitive with lower-cost Chinese imports. This could still trigger retaliation, but the EU’s executive body has to do something to protect an economically and strategically important industry.

This political reality only looms larger after this past weekend’s elections for the European Parliament, which rewarded right-wing populist parties in France and Germany. In the coming months a new European Commission will review the policy response to the EV investigation. Arguments for going easy on cheap Chinese EVs , because they help Europe’s climate goals, will presumably take a back seat to economic protectionism.

Just how much market share Chinese cars might take in Europe, at least in the short term, is debatable. After years of modest gains, they accounted for roughly one in 10 new EVs sold in Western Europe in the third quarter of 2023, according to Schmidt Automotive Research. But their share fell back in the final three months of the year, when France excluded China-made models from its subsidy program. High discounts on Chinese brands also point to stalling progress.

Many European consumers might not be ready for proudly Chinese brands such as BYD. The bestselling “Chinese” brand in Europe by far is MG, which is historically British but now belongs to China’s SAIC. Even it wasn’t one of April’s 10 bestselling EV models in the EU, according to data provider Jato Dynamics.

Many more Europeans would no doubt be converted to Chinese brands by the rock-bottom prices advertised domestically in China, which is in the throes of a vicious price war. But BYD launched its vehicles last year at surprisingly high prices, perhaps mindful of the EU’s investigation as well as the potential to juice its margins to compensate for a tough home market.

Still, the long-term threat posed by Chinese-made EVs in Europe is clear, and the EU won’t take any chances. One consequence of higher tariffs will be more local production. BYD is already building a factory in Hungary, while Volvo Cars will start producing its new EX30 in Belgium next year, rather than shipping it to Europe from China as it currently does. Tesla , which makes its Model 3 for Europe in its factory near Shanghai, will probably need to follow suit.

Other consequences will depend on China’s response. The China Chamber of Commerce to the EU said last month that Beijing was considering a 25% tax on imported cars with large engines. China’s current tariff on vehicle imports from the EU is 15%. This move would hit Porsche in particular as it makes about a quarter of its revenue in China and produces all its cars in Germany.

The irony is that investors previously assumed luxury cars were relatively insulated from the threat of Chinese EV imports. Last year, the market was instead worried about the competitive challenge to mass-market manufacturers such as France’s Renault . As politicians in Paris and Brussels responded, concerns shifted, contributing to a gaping divide in stock-market performance: Porsche’s stock is down 37% over one year while Renault’s is up 55%.

In the end, some kind of truce that keeps trade flowing is likely. The EU is more dependent on exports to China than the U.S., ruling out the kind of isolationism Washington is moving toward. That might be a reason to worry more about Renault again, though the French company appears to be making progress in cutting EV costs.

This points to the only sustainable European response to Chinese EVs: matching their technology and cost structure, at least as far as local differences allow. Higher tariffs can only buy a little time.

Must even steak be politicised? The American Heart Association recently recommended eating more “plant-based” protein in a move to counter the Health and Human Services Department’s new guidelines calling for more red meat.

Few would argue that eating a Big Mac a day is good for you.

On the other hand, growing evidence, including a study last month in the Journal of the American Medical Association, suggests that eating more meat—particularly unprocessed red meat—can reduce the risk of Alzheimer’s in the quarter or so of people with a particular genetic predisposition.

The APOE4 gene variant is one of the biggest risk factors for Alzheimer’s.

You inherit one copy of the APOE gene from each parent. The most common variant is APOE3; the least is APOE2.

The latter carries a lower risk of Alzheimer’s, while the former is neutral. A quarter of people carry one copy of the APOE4 variant, and about 2% carry two.

APOE4 is more common among people with Northern European and African ancestry. In Europe the variant increases with latitude, and is present in as many as 27% of people in northern countries versus 4% in southern ones. God smiled on the Italians and Greeks.

For unknown reasons, the APOE4 variant increases the risk of Alzheimer’s far more for women than men.

Women’s risk multiplies roughly fourfold if they have one copy and tenfold if they have two. Men with a single copy show little if any higher risk, while those with two face four times the risk.

What makes APOE4 so pernicious? Scientists don’t know exactly, but the variant is also associated with higher cholesterol levels—even among thin people who eat healthily.

Scientists have found that cholesterol builds up in brain cells of APOE4 carriers, which can disrupt communications between neurons and generate amyloid plaque, an Alzheimer’s hallmark.

The Heart Association’s recommendation to eat less red meat may be sound advice for people with high cholesterol caused by indulgent diets.

But a diet high in red meat may be better for the brains of APOE4 carriers.

In the JAMA study, researchers at Sweden’s Karolinska Institute examined how diet, particularly meat consumption, affects dementia risk among seniors with the different APOE variants.

Higher consumption of meat, especially unprocessed red meat, was associated with significantly lower dementia risk for APOE4 carriers.

APOE4 carriers who consumed the most meat—the equivalent of 4.5 ounces a day—were no more likely to develop dementia than noncarriers. (

The study controlled for other variables that are known to affect Alzheimer’s risk including sex, age, physical activity, smoking, alcohol consumption and education.)

APOE4 carriers who ate the most unprocessed meat were at significantly lower risk of dying over the study’s 15-year period and had lower cholesterol than carriers who ate less. Go figure. Noncarriers, however, didn’tenjoy similar benefits from eating more red meat.

The study’s findings are consistent with two large U.K. studies.

One found that each additional 50 grams of red meat (equivalent to half a hamburger patty) that an APOE4 carrier consumed each day was associated with a 36% reduced risk of dementia.

The other found that older women who carried the APOE4 variant and consumed at least one serving a day of unprocessed red meat had a cognitive advantage over carriers who ate less than half a serving, and that this advantage was of roughly equal magnitude to the cognitive disadvantage observed among APOE4 carriers in general.

In all three studies, eating more red meat appeared to negate the increased genetic risk of APOE4.

Perhaps one reason men with the variant are at lower Alzheimer’s risk than women is that men eat more red meat.

These findings might cause chagrin to women who rag their husbands about ordering the rib-eye instead of the heart-healthy salmon.

But remember, the cognitive benefits of eating more red meat appear isolated to APOE4 carriers.

Nutrition is complicated, and categorical recommendations—other than perhaps to avoid nutritionally devoid foods—would best be avoided by governments and health bodies.

Readers can order an at-home test from any number of companies to screen for the APOE4 variant.

The Swedish researchers hypothesize that APOE4 carriers may be evolutionarily adapted to carnivorous diets, since the variant is believed to have emerged between one million and six million years ago during a “hypercarnivorous” period in human history.

The other two APOE variants originated more recently, during eras when humans ate more plants.

APOE4 carriers may absorb more nutrients from meat than plants, the researchers surmise. Vitamin B12—low levels have been associated with cognitive decline—isn’t naturally present in plant-based foods but is abundant in red meat.

Foods high in phytates (such as grains and beans) can interfere with absorption of zinc and iron (also high in red meat), which naturally declines with age. So maybe don’t chuck your steak yet.

EV Trade War Could Spread to Luxury Cars

Investors used to worry about an invasion of Chinese electric vehicles into Europe. Tit-for-tat tariffs would instead hit Porsches heading to China.

At least for people who carry the APOE4 genetic variant, a juicy steak could keep the brain healthy.