“EU Weighs Import Restrictions on Chinese-Made Hybrid Vehicles”

[Financial News] The European Union (EU) is considering safeguard measures to restrict imports of Chinese-made hybrid vehicles into the bloc as a way to reduce its ballooning trade deficit with China.
According to foreign media reports on the 7th (local time), the European Commission is considering import restrictions that would impose tariffs on Chinese-made hybrid vehicles imported above a set volume, as sales of the vehicles in Europe surge.
A quarter of all cars currently sold in Europe are Chinese-made hybrid vehicles. Chinese automakers are making inroads with their hybrids, capturing a record 12% share of new-car sales in the European market last August.
Unlike electric vehicles, which face high tariffs of up to around 45%, Chinese-made hybrid vehicles are subject only to the EU’s standard 10% tariff.
According to EU sources, the EU is considering applying import restrictions on Chinese-made hybrid vehicles temporarily. It is also seeking to set the import cap low enough to avoid retaliation from China as much as possible.
Following the news, shares in European automakers surged across the board, with German automaker Volkswagen’s stock rising as much as 4.6% during the trading day.
The European Commission is also considering using hybrid vehicles as a test case for addressing the trade imbalance with China and, if the strategy proves effective, applying the same approach to other sectors.
Meanwhile, EU Commissioner for Trade and Economic Security Maroš Šefčovič is due to visit China for three days starting today, where he will hold in-depth discussions with Chinese Commerce Minister Wang Wentao on the trade imbalance and export controls on key materials such as rare earths. The outcome of the talks could change the EU’s plans.
Last year, the EU recorded a €360 billion deficit in trade in goods with China, up 15% from the previous year, amounting to a trade deficit of about €1 billion a day.
To protect European industries and jobs, which are at risk of collapse amid the onslaught of low-priced Chinese imports, the European Commission recently made resolving the trade imbalance with China a top priority. It has been negotiating for three months while demanding that China propose corrective measures by the end of this month.
New tools to address China’s trade practices are also expected to be discussed at the European Council meeting scheduled to take place in Brussels on the 15th and 16th.
Germany and France, the EU’s “twin engines,” recently proposed that the bloc adopt new measures beyond its existing defensive tools so it can respond more forcefully and swiftly to trade disputes threatening Europe, ahead of next week’s European Council meeting.
The EU had previously proposed that China introduce a voluntary export cap on hybrid vehicles, but China clearly rejected the proposal, saying it would seriously violate World Trade Organization (WTO) rules and run counter to the principles of a market economy.

[email protected] Lee Seok-woo, International Affairs Correspondent Reporter