Hybrid car deal offers a starting point
The European Commission reached a preliminary understanding with Beijing on 9 October to moderate Chinese hybrid and plug-in hybrid car exports to the EU. According to Reuters, the proposed safeguard would cap imports at 350,000 vehicles annually, with the limit increasing by 6% each year. It is expected to take effect in early December and remain in place for four years.
Chinese hybrid exports to the EU are projected to reach 800,000 vehicles in 2026. The measure is expected to reduce the market share of Chinese-built vehicles from around 12% to 6%. The safeguard would also apply to other EU trading partners.
European Trade Commissioner Maroš Šefčovič has called the agreement an important first step, but the Commission believes negotiations alone may not resolve the wider trade imbalance. EU leaders will assess the agreement and consider whether additional restrictions are necessary.
France and Germany push for tougher measures
France and Germany have jointly called for stronger trade-defence tools to address what they describe as harmful market distortions. Their proposals include urgent measures targeting chemicals and polyethylene terephthalate (PET), a plastic commonly used in packaging. They also seek to reduce dependence on single suppliers for critical materials and enable quicker responses when foreign countries harm European economic interests. The Commission is expected to propose an initial measure in December.
The joint position marks a significant change for Germany, which opposed EU tariffs on Chinese electric vehicles just two years ago. The shift reflects growing concern that inexpensive Chinese goods, alongside higher US tariffs, could weaken European manufacturing. Germany’s Volkswagen is planning to cut 100,000 jobs, highlighting the pressure facing the sector.
The Commission is also looking at ways to help European industries and regions hit by foreign trade measures. EU leaders are set to revisit the proposals at their summit on 17–18 December. The challenge is to support European businesses without disrupting ongoing trade talks with Beijing.