Full Breakdown
EU-China Trade Talks Focus on Hybrid Car Exports Amid a €1 billion-a-Day Deficit
By Drooid · · How we work
Core Event: Šefcovic’s Beijing Mission
On October 7, European Trade Commissioner Maros Šefcovic arrived in Beijing for two days of talks with Chinese Commerce Minister Wang Wentao. The agenda centres on reducing the EU’s daily trade deficit with China—estimated at more than €1 billion ($1.12 billion)—and addressing Chinese export curbs on rare-earth minerals. Šefcovic said he wants “tangible results by October” for the EU summit on October 15-16.
Background & Context
The EU-China trade imbalance widened to a €360 billion deficit in 2025, up 12 % year-to-date. The automotive sector is a flashpoint: imports of plug-in hybrid electric vehicles (PHEVs) rose 86 % in the year to September, while Chinese-built hybrids now account for more than a third of the EU’s hybrid market. In 2025 the EU imported over one million new cars from China but exported only 160,000, meaning one in eight cars sold in the bloc was Chinese-made.
Data & Statistics
- Trade deficit: > €1 bn per day (? €360 bn annually).
- Hybrid vehicle imports: +86 % YoY; price decline -20 %.
- BEV imports: +40 % YoY.
- Chinese car share in EU: > 33 % of hybrid market; 12.5 % of total car sales.
- Rare-earth imports: China supplied 46.8 % of EU weight-based imports in 2025.
Official Statements & Responses
- Maros Šefcovic – seeks a concrete measure, possibly a voluntary export restraint on hybrids, to cap Chinese market share at about 15 % of EU hybrid sales.
- Ursula von der Leyen – warned the imbalance had reached a “tipping point” and the EU will use every tool at its disposal.
- Wang Wentao – reiterated China’s “resolute response” to any EU restrictions and urged France and Germany to avoid “protectionist” paths.
- China’s Ministry of Commerce – announced an anti-dumping investigation on p-nitrotoluene imported from the EU, covering alleged dumping from 1 July 2025 to 30 June 2026.
Verbatim Quotes
- “Be careful what you wish for,” — Camille Boullenois, associate director, Rhodium Group consultancy
Conflicting Reports & Gaps
Sources agree on the deficit’s magnitude and the rise in Chinese hybrid imports. The specific form of any EU measure—voluntary restraint, price undertaking, or broader “instrument”—remains undefined, and Chinese willingness to accept a cap on hybrid exports is reported as refused, without detailed alternatives.
What’s Next
- October 9 – Šefcovic is scheduled to conclude talks in Beijing.
- October 15-16 – EU leaders will meet in Brussels to decide whether to adopt any commitments secured.
- The anti-dumping probe into EU-origin p-nitrotoluene may influence the negotiation climate.
The outcome will shape the EU’s strategy for addressing the structural trade imbalance and testing its emerging trade-defence toolkit.