EU Requests China to Voluntarily Limit Hybrid Vehicle Exports

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

Reuters Yonhap News

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

According to the sources, the EU is requesting that China limit its exports so that the market share of Chinese-made hybrid vehicles in Europe, which currently exceeds one-third, is reduced to around 15%. The EU's request is not limited to automobiles. One source said that the EU has also asked China to restrain exports of other items such as chemical products, while expressing that it hopes China will increase its imports of European products.

A massive influx of low-priced Chinese vehicles into the European market has prompted local automakers to carry out large-scale layoffs. In response to this situation, the EU executive branch has made it clear that if China does not voluntarily curb its automobile exports, the EU may raise tariffs. An EU official stated, "If China does not voluntarily restrict exports to the European market, we will step in," adding, "We must take action to prevent the deindustrialization of Europe. Ultimately, this is an issue of managed trade."

The EU is reportedly considering applying to China the same type of voluntary export restraint agreement that it once concluded with Japan. A source explained that the EU is using the 1986 agreement it reached with Japan as a model. At that time, Japan voluntarily limited its car exports to Europe, and this measure remained in place until 1999.

The European Commission is hoping that China's acceptance of voluntary export restrictions and the pursuit of a negotiated solution will yield positive results. However, it is reported that in Germany and France, which have shown differences over how to respond to China for several years, there is now a consensus that stronger measures may be necessary.

The EU pointed out in June that its trade deficit with China has been surging and set a deadline of October to achieve "visible results." The two sides have also launched the EU-China Trade and Investment Council (TIC) forum to discuss market access issues. Ursula von der Leyen, President of the European Commission, warned that the EU's trade deficit with China has reached 1 billion euros per day and has "hit a tipping point." In her annual State of the Union address, she also stated, "The second China shock is already a reality."

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