World

EU Urges China to Cut Hybrid Car Exports, China Rejects Voluntary Limits

By Bhanu Pratap

The European Union has asked China to voluntarily restrict the export of Chinese-made hybrid vehicles to Europe, a request that Beijing has declined, according to the Financial Times. The decision adds a new point of tension to trade talks between Brussels and Beijing, which are aimed at preventing a broader trade conflict. EU Trade Commissioner Maroš Šefčovič is traveling to Beijing for two days of negotiations with Chinese Commerce Minister Wang Wentao. The talks focus on the EU’s widening trade deficit with China, where Chinese exports of low‑cost electric and hybrid cars have become a key issue. Chinese carmakers captured a record share of nearly 12 % of Europe’s new‑car market in August and accounted for roughly one in three plug‑in hybrid sales in the region, Bloomberg reported. The EU is considering safeguard measures that could restrict imports, including a tariff‑rate quota that would allow a specified volume of imports and impose additional tariffs on vehicles above that threshold. The proposed restrictions would be time‑limited. The European Commission initially sought a negotiated solution rather than immediate new trade restrictions. The Financial Times reported on 17 September that Beijing could face higher tariffs if it does not agree to voluntary limits. The Commission hopes to secure a unilateral EU mechanism to cap hybrid imports rather than rely on Chinese export restrictions. The issue is expected to be a prominent topic in the latest round of EU‑China trade talks in Beijing, which begin on Thursday. The outcome could determine whether the Commission proceeds with its proposed safeguard measures. If successful, the EU may consider similar tools for other sectors where it sees significant trade imbalances. The continued growth in Chinese vehicle exports adds pressure on the EU to address concerns over an uneven trading relationship, as China maintains a large trade surplus with Europe.