The Impact of the EU Carbon Border Adjustment Mechanism on China’s Automotive Product Export Trade

With the growing global emphasis on energy conservation and emissions reduc-tion, countries and regions such as the United States, the European Union (EU), and Japan have enacted legislation to implement carbon tariffs. As a developing nation, China bears significant responsibilities in carbon taxation. The automo-tive industry, a pillar of China’s national economy, has long been a cornerstone of foreign trade exports. However, as a representative of the manufacturing sec-tor, it is also a major contributor to carbon emissions. The implementation of the EU’s Carbon Border Adjustment Mechanism (CBAM) is expected to intensify challenges for China’s automotive exports, particularly for components pre-dominantly exported to developed regions like the EU and the U.S. A review of existing literature on CBAM reveals a scarcity of research on its specific impacts on automotive manufacturing exports and a lack of methodological diversity. This study employs the Multi-Regional Input-Output (MRIO) model to calculate carbon emissions in the automotive industry and utilizes the Global Trade Analysis Project (GTAP) model to simulate dynamic impacts on domestic pro-duction and exports. The findings aim to propose strategies for reconciling the stable growth of China’s automotive manufacturing sector with emissions re-duction goals.