EU and China strike interim trade deal that could cut Chinese hybrid exports, EU envoy says
The deal could cut Chinese hybrid exports to the EU by more than half over four years, while easing rare earth supply concerns.
- On Friday, European Trade Commissioner Maros Sefcovic and Chinese Commerce Minister Wang Wentao reached a deal in Beijing to moderate Chinese exports of hybrid and plug-in hybrid vehicles to the European Union.
- European Commission President Ursula von der Leyen warned lawmakers last month that the trade gap reached a "tipping point," as Chinese exports to the EU totaled $560 billion last year while EU imports were $268.3 billion.
- Negotiators also agreed to reduce Chinese import duties on $4.5 billion worth of EU goods, including car parts and olive oil, while simplifying export licenses for rare earths and permanent magnets essential to advanced manufacturing.
- The agreement requires approval from leaders of all 27 EU nations, who will discuss the outcome at their summit in Brussels on Thursday, October 15.
- Sefcovic projected the deal could cut Chinese hybrid exports by more than half over a four-year period, with both sides committing to maintain communication and meet again next March.
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EU leaders discuss recent trade compromises with Beijing at EU summit. Dependence on China's rare earth remains the biggest problem.
Since the European Union imposed tariffs on Chinese electric vehicles, the affected car manufacturers shifted their focus to hybrid models, exporting them en masse to the EU. Now, the EU is taking measures against these hybrids, announcing a strict quota to protect domestic car brands and reduce the trade deficit with China.Under the new agreement, which has yet to be approved by member states, the number of hybrids from China entering the Europ…
This concession is worth it for China, the European automotive industry can breathe a sigh of relief for a while, but the trade balance problem is far from being solved.
EU-China Hybrid Car Pact Signals Fragile Truce in Auto Trade War
The EU and China reached an understanding that could slash projected hybrid vehicle exports by more than half over four years, ease rare earth licensing and cut tariffs on €4 billion of European goods. Maroš Šefčovič called it a first step toward fixing a massive trade deficit. Yet details remain thin and deeper tensions persist.
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