The European Union has urged China to voluntarily impose limits on the export of hybrid vehicles to the EU market in an effort to avoid escalating trade tensions, ahead of critical meetings scheduled in Beijing next month. The call comes as European automakers face significant pressure from a surge in cheaper hybrid car imports from China, prompting concerns about industrial decline within the bloc.
EU officials are reportedly seeking a commitment from China to reduce its hybrid vehicle exports to approximately 15 percent of the European market, a marked decrease from the current share of over one-third. This initiative is part of a broader negotiation in which Brussels also wants China to demonstrate restraint in exporting other goods, including chemicals, while increasing purchases of European exports.
An EU official described the proposed measures as essential to halt the "deindustrialisation" affecting Europe’s automotive sector, emphasizing the need for "managed trade." The official warned that should China fail to voluntarily restrict exports, the EU is prepared to implement higher tariffs as a defensive measure.
The tension arises amid the EU's growing trade deficit with China, which reached €1 billion daily, a figure that European Commission President Ursula von der Leyen cited as having “reached a tipping point” during her recent State of the Union address. Von der Leyen highlighted the urgency of rebalancing trade relations and vowed to deploy all available tools to address the imbalance.
EU Trade Commissioner Maroš Šefčovič conversed with Chinese Commerce Minister Wang Wentao ahead of his planned visit to Beijing next month, signaling high-level engagement on these issues. The discussions are part of the EU-China Trade and Investment Consultations forum, established earlier this year to improve market access and address trade disputes. The EU has set an October deadline for achieving “tangible results” aimed at reducing the trade deficit.
The EU’s appeal echoes a precedent set in 1986 when Japan agreed to voluntary export restraints on vehicles to Europe, a deal that lasted until the late 1990s. Current EU anti-subsidy tariffs on Chinese electric vehicles, imposed this year and reaching up to 45 percent, have only modestly tempered imports. However, shipments of Chinese hybrid vehicles—which face a lower 10 percent tariff—have surged dramatically, rising from 3,800 units in October 2024 to 50,000 in July 2026, accompanied by declining average prices.
German Vice-Chancellor Lars Klingbeil underscored growing support within Germany and France for tougher measures against what are seen as unfair trade practices. Speaking during a visit to Volkswagen headquarters, Klingbeil called for a more assertive approach toward countries threatening European industry.
China’s Ministry of Foreign Affairs did not respond to requests for comment on the matter, while the European Commission declined to provide additional statements. The outcome of the upcoming talks in Beijing will be closely watched as Brussels seeks to balance trade relations while protecting its domestic manufacturing base.