China rejects EU request to limit hybrid car exports

China rejected the European Union’s request to voluntarily restrict its exports of hybrid cars to the bloc, shortly before European Trade Commissioner Maroš Šefčovič’s visit to Beijing.

Šefčovič is taking part on Thursday and Friday in the second round of bilateral consultations on trade and investment. One of the EU’s objectives was for Beijing to agree to limit hybrid vehicle exports to approximately 15% of the European market, compared with more than one-third at present. According to diplomats cited by the FT, European officials were informed that the proposal had been rejected.

The European Commission is considering a temporary trade protection measure, which would allow the import of a limited number of vehicles, while the rest could be subject to very high tariffs. The measure would also apply to partners such as the United Kingdom, South Korea, and Japan.

The consultations risk failing, which could trigger a major trade conflict. The EU cites the annual trade deficit of nearly €360 billion and the pressure exerted by Chinese industries. Beijing rejects the accusations and accuses the Union of politicizing trade relations.