*This content was translated by AI.
The European Union (EU) has reportedly requested that China implement voluntary export restraints (VERs) in response to the surge in imports of Chinese-made hybrid electric vehicles (HEVs), and plans to pursue high-intensity trade measures, including tariff hikes, should an agreement fail. This marks a significant expansion of the EU’s trade regulatory scope, now extending from Chinese pure electric vehicles (BEVs) to include HEVs.
According to foreign media and industry sources, imports of Chinese-made HEVs into the EU surged from 3,800 units in October 2024 to 50,000 units by July 2026, while average prices declined. Currently, the EU imposes a base tariff of 10% on Chinese BEVs, plus additional countervailing duties reaching up to approximately 45%, but Chinese HEVs have been subject only to the existing 10% tariff. This is the fundamental reason behind the explosive growth in exports of Chinese HEVs to Europe. Consequently, while exports of Chinese BEVs showed a modest increase, exports of HEVs surged dramatically, emerging as a central issue in new trade conflicts.
The European Commission diagnosed that the offensive by Chinese-made HEVs is accelerating job losses and industrial hollowing-out within Europe’s automotive sector. Ursula von der Leyen Yoo Reop-jip-haeng (Chairman) pointed out that the EU’s trade deficit with China has reached a critical level, amounting to 1 billion euros per day.Accordingly, the EU plans to negotiate voluntary export restraints with China’s Ministry of Commerce, aiming to encourage Chinese automakers to increase direct investments in Europe or establish partnerships with local manufacturers.
If an agreement on voluntary export restraints fails to materialize, the EU intends to immediately initiate procedures for imposing additional tariffs targeting Chinese plug-in hybrid electric vehicles (PHEVs) and similar models. Major member states including Germany and France have formed a consensus on taking a firm stance against China. Maroš Šefčovič, EU Commissioner for Trade, is scheduled to visit Beijing in mid-October following his meeting with Wang Wentao, China’s Minister of Commerce, to finalize coordination.
Meanwhile, China finds itself caught off guard. China has traditionally classified Europe, Russia, Latin America, Australia, and Southeast Asia as "key open markets," while categorizing North America, Japan, India, and South Korea — among others — as markets with high entry barriers. Among these, Europe had been a primary market for HEVs rather than EVs. If the EU raises tariffs on Chinese-made HEVs as well, China will face significant constraints on its global growth trajectory and suffer major damage to one of its key markets.
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*This content was translated by AI.
