Two days of talks in Beijing

Maros Sefcovic, the European Commissioner for Trade, held two days of talks with Chinese Commerce Minister Wang Wentao in Beijing on Thursday and Friday. The Chinese Ministry of Commerce described the discussions as "pragmatic and productive" and said both sides reached an "understanding" on hybrid vehicle trade in a manner consistent with World Trade Organization rules, following intensive negotiations. The ministry gave no further details. The EU went into the talks seeking "tangible results", as its trade deficit with China exceeds €1 billion ($1.12 billion) a day. The Chinese ministry published the joint statement first, and Sefcovic then presented the outcome at a press conference in Beijing without his counterpart. He told reporters:

This is far from the end. It's a crucial first step, but only a first step.

What the understanding contains

Reuters reported that the two sides agreed to halve Chinese exports of hybrid and plug-in hybrid vehicles to the EU. Sefcovic's own wording was narrower: the understanding "opens the prospect" of reducing those exports by more than half, and he described it as an agreement in principle to moderate them. Speaking in Beijing, he said:

For the first time China has agreed to moderate its exports without entering a phase of tensions.

The joint statement says Beijing will keep facilitating licence approvals for rare earths and permanent magnets destined for the European market, and that the two sides will strengthen dialogue on export controls. On tariffs, ANSA reports that China agreed to reduce duties on some European products, a step that could save the EU at least 225 million euros. The Chinese ministry's statement, as Reuters reported it, says only that both sides will keep exploring lower tariffs on certain goods within WTO rules. Talks on price undertakings and review procedures in the EU's anti-subsidy investigation into Chinese electric vehicles will continue, along with dialogue on market access for medical devices. Implementation requires approval from leaders of all 27 EU member states, and the European Council on Thursday and Friday next week will take up the China file.

Why Brussels pressed the issue

EU plug-in hybrid imports rose 86% in the year to September, while prices fell 20%, according to Reuters. China accounted for about 30% of the value of EU plug-in hybrid imports in 2025, and more than half of those vehicles now come from China. A Franco-German document co-signed on Monday called for expanding production capacity in key strategic sectors, faster anti-subsidy and anti-dumping investigations, a "diversification instrument" and a "kill switch" against retaliation. Before leaving for Beijing, Brussels had also prepared a scheme to cap imports of Chinese hybrids, ANSA reported. Since 2019, EU manufacturing imports from China have risen 44% while exports have fallen 55%, according to LSEG Datastream. The EU imposed penalty duties on Chinese electric vehicles in 2024, and the dispute has since widened to brandy, pork, dairy, rare earths and critical minerals.

Reactions and next steps

Sigrid de Vries, head of the European Automobile Manufacturers' Association (ACEA), said:

It may contribute to an orderly transition to a new stage of China's presence in the European market, which serves the long-term interests of all parties.

A Breakingviews column warned that half-measures risk EU leaders letting momentum slip at their meeting next week. The two sides agreed to hold a ministerial-level video conference in January 2027 and a third regular consultation meeting in March 2027.