EU and China Reach Deal Capping Chinese Hybrid Car Imports at 350,000 a Year

The European Union and China have reached a deal that could cut Chinese hybrid car exports to Europe by more than half, Reuters reported, following meetings between European trade commissioner Maroš Šefčovič and Chinese commerce minister Wang Wentao.

Under the agreement, the EU will cap Chinese hybrid imports at 350,000 cars per year, according to Bloomberg. Asked at a press conference about restricting access to affordable clean-energy products, Šefčovič said the EU needed to “provide adequate remedies and protection for the European car industry,” according to Carbon Brief’s account of the briefing.

Minerals, inverters and a tax rebate cut

China also pledged to facilitate licenses for rare-earth and permanent-magnet exports to the EU through a dedicated “green channel,” Bloomberg reported. A joint statement from the meeting said discussions were continuing on restrictions over “the use of EU funds for clean-energy projects involving certain inverters.”

Separately, China announced after the meeting that it would cut export tax rebates for new-energy vehicles to 13 percent, Caixin reported, a move that could “lead to higher prices overseas.”

Before the meeting, France and Germany had announced their support for a “kill switch” on trade with China, the South China Morning Post reported, a measure that could be triggered if a country was “perceived to be creating severe distortions” through its trade with the EU.

The EU also selected 46 “strategic projects” to improve its supply of critical minerals, according to an announcement by the European Commission. EU leaders will “provide further guidance” on reducing global macroeconomic imbalances at a meeting on October 15 and 16, according to a letter from European Council president António Costa.

Reporting based on coverage by Carbon Brief, with reporting by Reuters, Bloomberg, Caixin and the South China Morning Post.