EU weighs safeguard limits on Chinese hybrid vehicle imports, Bloomberg reports
In short
The European Commission is reviewing safeguard measures that would cap imports of Chinese hybrid vehicles and impose tariffs on volumes above that limit, Bloomberg reported, citing people familiar with the matter. Chinese hybrids now account for about a quarter of hybrids sold in Europe, and Chinese automakers reached a record 12% share of European new car sales in August. Talks with Beijing, including a visit by EU trade commissioner Maroš Šefčovič, could still change the plan.
Read the full story 2 min read
The European Commission is reviewing safeguard measures that would restrict imports of Chinese hybrid vehicles into the EU, Bloomberg reported on 7 October local time, citing people familiar with the matter. Under the approach being considered, the EU would set an import ceiling and impose tariffs on volumes above it — a tariff-rate quota — according to Yonhap and Hankook Ilbo. The review was reported by Chosun Ilbo as well. [ 1 , 2 , 3 ]
The measure would target a segment where Chinese makers have advanced quickly. Chinese-made hybrids account for about a quarter of hybrid vehicles sold in Europe, and Chinese automakers recorded a record 12% share of European new car sales in August, the documents say. Chinese hybrids are subject to a 10% base EU tariff, while Chinese electric vehicles face tariffs of up to about 45%. Hankook Ilbo, citing experts, said demand shifted toward hybrids after the EU began imposing high tariffs on Chinese electric vehicles in October 2024. [ 1 , 3 ]
The EU's stated aim is to reduce its goods trade deficit with China, which reached €360bn last year, up 15% from a year earlier and equivalent to about €1bn a day. The Commission has made resolving the imbalance a top priority, demanding that China present corrective measures by the end of this month after three months of negotiations, according to the reports. [ 1 , 3 ]
A negotiated path has already been tried. The EU proposed that China apply a voluntary export ceiling on hybrid vehicle shipments, but Beijing rejected the idea, saying it would seriously violate World Trade Organization rules and contradict market economy principles, the documents say. EU trade commissioner Maroš Šefčovič began a three-day visit to China to meet commerce minister Wang Wentao, with talks focused on the trade imbalance and export controls on rare earths and other critical materials. A source told Bloomberg the outcome of those talks could change the EU's plans. [ 1 , 3 ]
Yonhap reported that the EU is considering applying the measure temporarily and wants the import ceiling set low enough to avoid Chinese retaliation as far as possible. The Commission would use hybrids as a test case for correcting the trade imbalance with China and could apply the same approach to other sectors if it works, the source said. An EU summit in Brussels on 15–16 October is due to discuss new instruments for responding to Chinese trade practices, and Germany and France have proposed tools going beyond existing defensive measures. [ 1 , 3 ]
After the report, Volkswagen shares rose as much as 4.6% intraday and European automaker shares gained broadly. [ 1 ]
Why it matters
The measure, if adopted, would extend EU trade defences from electric vehicles to hybrids, a segment where Chinese makers have gained share quickly. Movement in European automaker shares after the report suggests investors see a cap as relief for local producers. Because the EU is treating hybrids as a test case, the same approach could be applied to other sectors, the documents say.
Key facts
- The European Commission is reviewing safeguard measures on imports of Chinese hybrid vehicles, according to Bloomberg, cited by Korean outlets. [ 1 , 2 , 3 ]
- The proposed mechanism would set an import ceiling and impose tariffs on volumes above it, described as a tariff-rate quota. [ 1 , 3 ]
- Chinese-made hybrids account for about one quarter of hybrid vehicles sold in Europe, and Chinese automakers recorded a record 12% share of European new car sales in August. [ 1 , 3 ]
- Chinese hybrids face a 10% base EU tariff, while Chinese electric vehicles face tariffs of up to about 45%. [ 1 , 3 ]
- The EU recorded a €360bn goods trade deficit with China last year, up 15% from a year earlier, or about €1bn a day. [ 1 , 3 ]
- The EU earlier proposed a voluntary export cap on hybrid vehicle shipments to China; Beijing rejected it, saying it would violate WTO rules and market economy principles. [ 1 , 3 ]
- EU trade commissioner Maroš Šefčovič began a three-day visit to China to meet commerce minister Wang Wentao on trade imbalance and export controls on rare earths and other critical materials. [ 1 , 3 ]
- Volkswagen shares rose as much as 4.6% intraday and European automaker shares rose broadly after the report. [ 1 ]
Confirmed by several sources
- The European Commission is considering safeguard measures to restrict imports of Chinese hybrid vehicles, according to Bloomberg reporting cited by the outlets. [ 1 , 2 , 3 ]
- The plan under discussion would impose tariffs on volumes exceeding a set import level, a tariff-rate quota approach. [ 1 , 3 ]
- Chinese-made hybrids make up about a quarter of hybrids sold in Europe, and Chinese automakers hit a record 12% share of European new car sales in August. [ 1 , 3 ]
- Chinese hybrids are subject to a 10% base tariff in the EU, unlike electric vehicles from China, which face tariffs of up to about 45%. [ 1 , 3 ]
- The EU proposed a voluntary export ceiling on hybrid shipments and China rejected it, citing WTO rules and market economy principles. [ 1 , 3 ]
- The EU's goods trade deficit with China was €360bn last year, up 15%, about €1bn a day, and the Commission has made correcting the imbalance a top priority while demanding Chinese corrective measures by the end of this month after three months of negotiations. [ 1 , 3 ]
- EU trade commissioner Maroš Šefčovič was scheduled to spend three days in China meeting commerce minister Wang Wentao, and the outcome could change the EU's plans. [ 1 , 3 ]
- The Commission would treat hybrids as a test case and could apply the same approach to other sectors if it works, the source said. [ 1 , 3 ]
Still unclear
- Whether the safeguard measure will be formally proposed or adopted, and on what timetable. The documents describe a review based on unnamed sources cited by Bloomberg; no decision is reported.
- What the import ceiling would be and which specific products it would cover. The documents say only that the EU wants the cap set low enough to avoid Chinese retaliation, without giving a figure.
- Whether the Šefčovič talks in China will alter the plan. A source told Bloomberg the outcome of the talks could change the EU's plans, leaving the result open.
What local media are saying
Timeline, local time
- Yonhap publishes a Brussels-datelined report that the EU is reviewing safeguard measures on Chinese hybrid vehicle imports. [ 1 ]
- Chosun Ilbo reports the same review, citing Bloomberg, and links it to the EU's trade deficit with China. [ 2 ]
- Hankook Ilbo reports the possible safeguard measure and the tariff-rate quota option. [ 3 ]
- An EU summit in Brussels is due to discuss new instruments for responding to Chinese trade practices. [ 1 ]