European Union Trade Commissioner Maroš Sefčovič announced Friday that China has agreed to halve its exports of hybrid vehicles to the European bloc, following two days of high-level trade talks in Beijing. The preliminary agreement represents a significant step in resolving escalating tensions over widening trade imbalances between Europe and China.
Sefčovič, who traveled to Beijing for the negotiations, described the talks as a positive first step after a summer of rising friction. "By this step we are actually preventing several millions of car exports from China to the European Union," he said, according to reports. The EU trade commissioner noted, however, that the final decision would still require approval from Brussels, with plans to brief EU leaders meeting in the capital next week.
The agreement, which emerged from talks between Sefčovič and Chinese Commerce Minister Wang Wentao, extends beyond hybrid vehicles. Both sides reached understandings on lower tariffs for European products, including car parts, olive oil, and footwear, totaling approximately 4 billion euros in current export value. The deal also includes provisions to further facilitate China's export licensing for rare earths and permanent magnets, commodities critical to European manufacturing. The Chinese Commerce Ministry issued a statement saying both sides had reached "an understanding" on hybrid car trade and agreed to continue exploring possibilities for lower tariffs on additional products, though specific details were not disclosed.
The negotiations address one of the central sources of friction between the EU and China: a widening trade surplus favoring Beijing. China's overall trade surplus with the 27-nation EU reached 360 billion euros last year. Germany and France had previously called on Brussels to develop "last-resort" trade instruments to address imbalances. The EU has already moved to limit imports of Chinese-made electric vehicles and EV batteries and has enacted measures to protect its steel industry and limit duty-free imports of e-commerce small parcels, a measure essentially targeting Chinese fast-fashion firms. China launched an anti-dumping investigation into EU imports of p-nitrotoluene, a chemical compound used in dyes and pharmaceuticals, in response to what officials characterized as protectionist measures.
Sefčovič had set an October deadline for meaningful results on trade rebalancing, making the timing of this preliminary agreement significant. He described the talks as the culmination of three months of intensive work. Earlier this year, on June 29, both sides held the first meeting of the EU-China Trade and Investment Consultations, during which officials agreed to subsequent meetings scheduled for a video conference in January and an in-person session in March 2027.
The agreement comes amid broader global trade tensions. The United States, particularly since President Donald Trump returned to the White House, has raised tariffs and enacted other measures aimed at reducing its own substantial trade deficit with Beijing. China's global trade surplus hit 1.2 trillion dollars in 2025 and is forecast to surpass 1 trillion dollars again this year, according to reports. Sigrid de Vries, head of the European Automobile Manufacturers' Association, said the deal appears to avert further instability in the EU market and "can help facilitate the transition to a new era of Chinese presence in the European market in an orderly way and this is in the long-term interests of all parties."
Chinese officials have also raised concerns during negotiations. Wang Wentao expressed concerns about the EU's recent restrictive measures, stating that China is not the root of the EU's problems but a partner in solving them. China has been pushing the EU to stop blocking Chinese imports of advanced computer chipmaking machines, restrictions the EU has imposed on national security grounds at Washington's behest. The Chinese Commerce Ministry earlier this week urged the EU to avoid protectionist measures, warning that such moves could backfire.
