China and EU Agree to Curb Electric Vehicle Exports by Up to 50%

Brussels and Beijing have agreed to a framework that could cut Chinese exports of electric and plug-in hybrid vehicles to the European Union by more than half, according to European Trade Commissioner Maros Sefcovic.

The announcement followed two days of negotiations in Beijing aimed at addressing the widening trade deficit between the bloc and China. Sefcovic described the outcome as the culmination of three months of intensive discussions, noting that the agreement would likely prevent several million Chinese cars from entering European markets over the next four years.

“We’re actually preventing several millions of car exports from China to the European Union,” Sefcovic told reporters during a press conference in the Chinese capital. While specific implementation details were not disclosed, he expressed satisfaction with the result.

Beyond the automotive sector, the deal includes provisions for China to reduce import duties on €4 billion ($4.5 billion) worth of European exports, which covers car parts, olive oil, and footwear. Additionally, both parties agreed to streamline the licensing process for China’s exports of rare earths and permanent magnets.

The agreement now requires endorsement from the leaders of all 27 EU member states, who are scheduled to discuss the terms at their summit in Brussels on Thursday.

The talks come amid growing concern in Europe about the surge in Chinese trade. Data from UN Comtrade indicates that Chinese exports to the EU reached $560 billion last year, rising from $517 billion in 2023. Shipments to key economies including Germany, Italy, Spain, and Poland each saw roughly a 10% increase year-over-year, while Hungary recorded a 43% jump. Conversely, Chinese imports from Europe fell slightly to $268.3 billion from $269.4 billion the previous year.

Last month, European Commission President Ursula von der Leyen warned the European Parliament that the trade imbalance had reached a critical level, stating that the bloc would utilize all available mechanisms to rebalance economic relations with China.