EU-China trade talks zero in on cars

Por Camille Gijs, Carlo Martuscelli, Hans von der Burchard, Jacopo Barigazzi, Jordyn Dahl — Sustainability – POLITICO

BRUSSELS — Crunch negotiations between the European Commission and China are zeroing in on cars ahead of Trade Commissioner Maroš Šefčovič’s trip to Beijing this week, four people with knowledge of the situation told POLITICO.

Brussels is eyeing a commitment from Beijing on stemming exports of hybrid vehicles, one of the people said, making it a potential deliverable of Šefčovič’s two-day visit starting Thursday. The discussions mark the final round of a four-month-old push by Brussels to reduce the bloc’s €1-billion-a-day trade deficit with China.

Šefčovič will meet Chinese Commerce Minister Wang Wentao with political backing from the EU’s biggest countries to take a tougher line toward Beijing.

German Chancellor Friedrich Merz and French President Emmanuel Macron called in a joint letter Monday for the EU executive to be handed the power to restrict — or even cut off — imports from countries that distort the bloc’s single market. The appeal comes as concerns grow that Chinese overproduction is leading to factory closures and job losses across Europe.

Most EU capitals welcomed the Franco-German proposal at a meeting of European ambassadors Tuesday, three EU diplomats said. Some praised Germany in particular for taking a tougher line after previously showing reluctance to retaliate against Chinese or U.S. economic coercion. 

“The German chancellor has shifted toward a strategic, geopolitical approach. This will change the dynamics of the work and negotiations within the EU,” said one of the diplomats, who, like the others quoted in this piece, was granted anonymity to describe the closed-door meeting.

A fourth EU diplomat said that a sectoral agreement could serve as a template for other industries facing similar pressures later on in the negotiations. Options on the table include voluntary export restraint or other measures such as price undertakings.

Hardest hit  

The European auto industry has been one of the hardest hit by Chinese overcapacity. 

The EU imported more than a million new cars from China in 2025, and exported only 160,000. In August, one in eight cars sold in the bloc was Chinese, mainly thanks to a boom in sales of plug-in hybrid electric vehicles. Unlike Chinese battery-electric vehicles, which have faced EU tariffs since 2024, plug-in hybrids are not subject to European duties.

The automotive industry is central to the EU’s biggest economy, Germany, supporting around 2.2 million jobs and accounting for a third of industrial research and development spending. 

Volkswagen has called on the Commission to curb the surge in hybrid imports. The German automaker is in the midst of a cost-cutting plan that will cull 100,000 jobs worldwide and shutter four factories on German soil.

Managing expectations 

The EU executive briefed ambassadors on the state of play ahead of Šefčovič’s trip, with one diplomat describing the atmosphere between Brussels and Beijing as “pessimistic.”

The Commission will present the outcome of this week’s talks to EU leaders when they meet for a summit in Brussels on Oct. 15-16. They would then decide, if they are satisfied with progress, whether the talks should continue.

Camille Boullenois, an associate director with the Rhodium Group consultancy, warned that a partial victory could prove paralyzing.  

“Be careful what you wish for,” said Boullenois. “A symbolic and narrow win could risk slowing down broader trade defence action in Brussels.”

Even so, cars account for only a small share of the EU’s overall trade imbalance with China.

According to the European Automobile Manufacturers Association (ACEA), China’s automotive exports to the EU totaled €15.1 billion. To put that into context, the EU’s trade deficit with China totaled nearly €360 billion in 2025, and is already up 12 percent so far this year. 

A fifth EU diplomat told POLITICO that all eyes are now on Šefčovič to deliver when he goes to Beijing. 

“There’s a broad consensus on the need to maintain dialogue,” the diplomat said. But, they added, “We need some results.” 

This article has been updated.

Fonte: Sustainability – POLITICO