China, EU hold talks on hybrid and electric vehicle trade

China and the European Union have held what Beijing described as “intensive consultations” on trade in hybrid and electric vehicles, as both sides seek to address economic and trade concerns.

China and the European Union have held what Beijing described as “intensive consultations” on trade in hybrid and electric vehicles, as both sides seek to address economic and trade concerns.

China’s commerce ministry said on Monday that the two sides had reached an understanding on hybrid vehicles, including a provision that export quotas for Chinese vehicles should be no lower than those allocated to other sources of imports.

The ministry also said EU measures should not specifically target Chinese products or discriminate against Chinese companies.

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European officials have faced pressure to protect domestic carmakers from competition posed by lower-cost imports, while Beijing has called for what it says is fair treatment under World Trade Organization rules.

The two sides discussed cooperation mechanisms, including price undertakings tailored to individual companies, to manage competition and avoid a broader trade dispute, according to the ministry.

They also agreed to adjust hybrid vehicle export quotas upwards from 2025 levels, the ministry said, in a move intended to provide Chinese companies with greater opportunities and more predictable growth.

The talks also covered strategic supply chains, including critical rare earth materials, as well as access to agricultural markets.

The discussions appear to have helped keep tensions from escalating immediately, although the long-term impact will depend on the details and implementation of any agreed measures.

Both sides have signalled a willingness to maintain dialogue as they seek to balance climate goals with the protection of domestic industries.