as well as their own operations in China
This is the reason. It is not because of their interest in fairness or free market (there is none), but because China is both critical to their production process and a massive market that cannot be ignored. If China retaliates their execs won’t be able to buy their tenth yacht.
I would say that is largely irrelevant. Chinese EVs are so much cheaper there is no way Western producers can compete with them barring tariffs. In a level playing field Chinese companies will completely push out the Western ones in low- and mid-range market. For luxury vehicles maybe the brand recognition can save them but in a tight economy cheaper cars will attract a lot of attention.