EU Tariff on Chinese EVs · Tariff Wedge and Deadweight Loss (Interactive)

The term-paper model of the China-origin EV import market. A tariff at rate τ lifts the import-supply price from p* to pt = p*(1+τ), so the equilibrium import quantity falls from q0 to q1 along a fixed demand curve. Move the slider and the welfare areas update in real time.

Demand curve S: supply curve before tariff S + t: supply curve after tariff Government revenue Deadweight loss

Tariff rate τ

20.7%
Import demand is fixed at the calibrated curve q = 491,164 − 13.0219 · (p − 22,452); only the tariff rate τ changes.
Deadweight Loss
EUR 140.7m
Triangle: ½ · t · (q0 − q1)

Current scenario results

Tariff per vehicle t = τp*
Price without tariff p*
Price with tariff pt = p* + t
Quantity before tariff q0
Quantity after tariff q1
Quantity reduction q0 − q1
Government revenue t·q1
Deadweight loss
Consumer surplus loss = t·q1 + ½·t·(q0−q1) = . Of this, transfers to government and is the deadweight loss.

Official tariff-rate scenarios (calibrated b)

Scenarioq1Gov. revenueDWL