Research On The Impact Of Carbon Tariff On The Export Trade Of China’s Automobile Products And Countermeasures

With the increasing international demand for energy conservation and emission reduction,countries and regions such as the US,EU and Japan have started to enact legislation to implement carbon tariffs.China,as a developing country,is one of the countries that bear the burden of taxation internationally,and energy conservation and emission reduction are important issues for various industries.The automotive industry has been a major contributor to carbon emissions,and exports of automotive products undoubtedly face significant challenges.In particular,China’s auto parts are mainly exported to developed countries and will undoubtedly be affected by carbon tariffs.This paper first introduces the concept and background of carbon tax in detail,analyzes the possibility of China becoming a target of carbon tax based on the production status and export trade structure of China’s auto industry,and concludes that China is likely to be listed as a target once the carbon tax law is implemented.The report also analyzes the current situation and problems of China’s exports of automotive products(including finished vehicles and parts)based on the current situation of China’s exports,which is the factual basis for the policy recommendations in the next section.The empirical process uses the implicit carbon content of Chinese automotive products as an indicator of carbon tariffs.After measuring implicit carbon,this paper conducts an empirical analysis based on a trade gravity model on the corresponding panel data.First,we show that the logarithm of implicit carbon in developed countries is significantly and positively correlated with the logarithm of China’s auto exports to developed countries.The baseline regression results suggest that the imposition of carbon tariffs will limit China’s exports to developed countries.Second,the fixed effects regression results for China’s auto exports to both developed and developing countries suggest that a widespread global imposition of carbon tariffs would also negatively affect China’s auto exports.Similarly,given that the current carbon tariffs originate in developed countries,we examine a counterfactual hypothesis on how carbon tariffs would affect China’s exports of automotive products to developing countries.The results show that if a developing country imposes a carbon tariff on China’s auto exports,the negative impact on China’s exports would be substantial.Due to the possible inertia effects and lags in the volume of China’s foreign trade in automotive products,this paper uses a differential GMM for robustness testing.The results of the empirical and robustness tests in this paper indicate that the imposition of carbon tariffs has a significant negative impact on the exports of Chinese automotive products,both to developed and developing countries,and hinders the further expansion of Chinese automotive exports.Based on the above findings and the current situation of auto exports,this paper makes the following recommendations to the government and enterprises.From the government’s perspective,China needs to actively use the WTO’s legal mechanisms and principles that are favorable to China internationally and participate in the formulation of international rules and standards to protect its basic rights and interests.At the same time,it should also use diplomatic means to respond to the international call for emission reduction and work to develop laws and carbon tariffs to achieve a certain level of discourse.At the national level,in addition to subsidizing and supporting corporate actions to reduce emissions,carbon tariffs can be avoided by imposing carbon taxes in advance.At the company level,carbon tariffs can be addressed by reducing their own emissions,relocating production facilities,making their brands more competitive,and establishing early warning systems in four areas.