Maroš Šefčovič, the EU trade commissioner, is due in Beijing on Oct 8-9 after three months of intensive consultations, seeking an answer to a problem that has become painfully concrete for Europe’s car industry: China’s expanding sales of vehicles and the widening gap in goods trade.
Šefčovič is scheduled to meet Chinese Commerce Minister Wang Wentao in Beijing next Thursday for high-stakes talks between the EU and China. The commissioner has told Chinese officials that the trade gap needs to come down, warning that “thousands and thousands of jobs in the EU” would otherwise be at stake.
The pressure comes from China’s position as the global leader in electric vehicles, with leading manufacturing capacity in batteries, solar panels and wind turbines. Its hybrid-car exports rose from just under 4,000 vehicles a month to 50,000.
China’s trade surplus with the EU is running at well over $1 billion a day. France’s High Commission of Strategy and Planning has warned that lower-cost Chinese competition threatens one quarter of France’s own exports. Germany was assessed as more exposed: one third of its exports and two thirds of domestic production were found to be directly threatened by Chinese competition.
Brussels responded in 2024 by placing a tariff on Chinese electric cars. The European automotive industry is also contending with electrification and stagnant consumer demand. The wider dispute includes arguments over indirect subsidies and transshipment between China and the EU.
Now EU officials are trying to persuade China to accept voluntary limits on hybrid-vehicle exports to Europe. Brussels also wants Beijing to accept quotas on selected Chinese exports, including so-called “voluntary export restraints” on electric vehicles.
Šefčovič has said he wants evidence that consultation can produce practical results. “What we definitely need to bring back are clear pointers,” he said, along with “a couple of pilot schemes where I can prove for a certain group of products that this consultation, this cooperation, works”.
The proposal has a trade-rule complication. Article 11 of the World Trade Organization Agreement on Safeguards prohibits members from seeking, taking or maintaining voluntary export restraints and similar arrangements. The WTO calls them “gray-area” measures that the multilateral trading system was designed to eliminate.
That leaves the negotiators looking for an arrangement that can reduce the pressure on European producers while surviving the rules meant to govern it. China, for its part, is scaling back EV tax incentives.
The EU is considering further protection, including a “Buy European” stipulation that would confine government-backed or large-scale automobile purchases to cars produced inside the EU. Such tariffs and EU-origin requirements raise consumer prices.
Brussels has threatened tougher measures if the October talks do not produce “tangible” results. What China will accept, and what either side will count as a sufficient result, remains unknown.
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