European Union trade negotiators fly to Beijing on Wednesday for two days of talks aimed at securing a breakthrough deal to curb a surge of cheap Chinese hybrid-car imports, as EU member states harden their stance on what officials call an unsustainable trade imbalance with China.
EU trade commissioner Maroš Šefčovič and his team are scheduled to negotiate through Friday, with officials hoping for what one described as "tangible, meaningful and measurable" progress before a summit of EU leaders in Brussels next Thursday, where China's trade practices are high on the agenda, according to Guardian reporting from Brussels.
A loophole that outgrew its tariffs
The talks are focused on a single sector seen as a test case: hybrid vehicles, which fall outside the roughly 45% anti-subsidy tariffs the EU imposed on Chinese-made battery electric vehicles in October 2024 and instead face a 10% duty. Chinese exporters pivoted hard toward that gap — EU imports of Chinese hybrids rose from about 3,800 vehicles in October 2024 to roughly 50,000 in July this year, even as average prices fell, according to a Financial Times report cited by Battery-Tech Network. Brussels puts China's overall trade surplus with the bloc at roughly €1 billion a day.
The EU asked China last month to voluntarily limit hybrid exports, warning that safeguards including quotas could follow if shipments weren't restrained. It isn't known how Beijing responded, but people familiar with the talks say the mood has shifted as more EU governments push for protection of their domestic auto industries.
That shift was underscored this week when German Chancellor Friedrich Merz sided with French President Emmanuel Macron in backing a new EU instrument that would let the bloc restrict market access on short notice. In a joint paper, the two countries warned of a "massive industrial shock" threatening sectors including pharmaceuticals, aerospace, autos, machine tools and chemicals, and called for new tools to respond when "third countries seek to undermine the restoration of a level playing field."
Andrew Small, Asia director at the European Council on Foreign Relations, said the Beijing talks will test both sides' resolve. The negotiations, he said, will "determine whether China is willing to put sufficiently serious offers on the table" — with the car sector seen as a template that could be extended to other industries if a deal holds.
