EU Requests China to Voluntarily Limit Hybrid Vehicle Exports

The European Union (EU) has reportedly requested that China voluntarily restrict its exports of hybrid vehicles.

Reuters Yonhap News

The Financial Times (FT) reported on the 16th (local time), citing three sources, that the EU is in discussions with China regarding measures to curb the influx of Chinese-made vehicles into the European market.

According to these sources, the EU has asked China to voluntarily restrict exports so that the market share of Chinese-made hybrid vehicles, which currently exceed one-third in the European market, is reduced to around 15%. The EU's request is not limited to automobiles. The sources further stated that the EU is also urging China to refrain from exporting other goods, such as chemical products. At the same time, the EU hopes that China will increase its imports of European products.

The massive influx of low-priced Chinese vehicles into the European market has prompted local car manufacturers to implement large-scale layoffs. In light of this situation, the EU executive branch has made it clear that if China does not voluntarily restrain its automobile exports, tariffs could be raised. An EU official stated, "If China does not voluntarily limit its exports to the European market, we will take action. We must act to prevent Europe's deindustrialization. Ultimately, this is a question of managed trade."

It has been reported that the EU is considering applying to China the kind of voluntary export restraint agreement it once concluded with Japan. The sources explained that the EU is taking as a model the 1986 agreement reached with Japan, under which Japan voluntarily limited automobile exports to Europe—a measure that remained in effect until 1999.

The European Commission hopes that China will agree to voluntary export restrictions and that a negotiated solution will be effective. However, it is reported that there is growing consensus in Germany and France—which have shown policy differences regarding China's response over the years—that stronger measures may be necessary.

In June, the EU cited the rapidly growing trade deficit with China and set an October deadline for “visible results.” The two sides also launched the EU-China Trade and Investment Cooperation (TIC) Forum to discuss market access issues. European Commission President Ursula von der Leyen has warned that the daily trade deficit with China now reaches 1 billion euros, saying it has “reached a tipping point.” In her annual State of the Union address, she stated that “a second China shock is already here.”

This content was produced with the assistance of AI translation services.