BEIJING — China and the European Union have agreed to limit Chinese hybrid vehicle exports, but the two sides are describing the deal in sharply different terms. Brussels has highlighted its success in cutting imports of Chinese hybrids by more than half, while Beijing has countered that shipments will actually increase compared with past volumes. Analysts say China accepted some constraints on export growth in exchange for avoiding a head-on clash with the EU while preserving its influence in the European market.
China's Ministry of Commerce posted a spokesperson's statement on its website on the 13th, saying that according to data from the EU's statistical office, the bloc imported 107,000 Chinese hybrid vehicles in 2024 and 302,000 in 2025. "The two sides agreed on an arrangement that expands volumes based on the 2025 level, securing Chinese companies' export capacity and stable growth," the ministry said.
The tone contrasts noticeably with the EU's earlier announcement. European Commissioner Maros Sefcovic told a news conference in Beijing, after wrapping up two days of talks with Chinese officials, that the two sides had reached an agreement on implementing a trade safeguard that could cut Chinese hybrid vehicle exports by more than half. He stressed that imports could be reduced by millions of units over the next four years.
Beijing, however, stopped short of explicitly denying the specific import quota figures reported by foreign media. Bloomberg reported a day earlier, citing an internal EU document, that the two sides had agreed to cap imports of Chinese hybrid vehicles at 350,000 units next year and to expand the quota by 6% annually thereafter, running the system for four years.
The conflicting accounts stem from different baselines. The EU emphasized the effect of cutting imports by more than half against this year's expected 800,000 units, while China pointed to an increase in export volumes measured against last year's 302,000 units.
The gap widened sharply in just one year because China has been ramping up hybrid vehicle exports to avoid the EU's steep tariffs. The bloc imposes countervailing duties of up to 35.3% on Chinese battery electric vehicles on top of the existing 10% tariff, but does not apply them to hybrids. Chinese customs data show that hybrid vehicle exports to the EU reached 6.7 billion euros in the first half of this year, roughly triple the 2.2 billion euros recorded a year earlier.
China's statement is seen as a counter to the EU's portrayal of the deal as a successful squeeze on Beijing. Even with the annual cap of 350,000 units, analysts say the actual damage to China will be limited, because Chinese automakers are rapidly expanding production bases inside the EU to work around trade barriers. BYD is building a passenger car plant in Hungary and aims to begin assembly there late this year. It is also considering additional production sites in France and Spain. Chery and Geely plan to start production in Spain this year and in 2028, respectively. Leapmotor, Hongqi and Xpeng have either begun or are pursuing contract manufacturing through European automakers. The assessment is that Beijing has secured practical gains while avoiding an all-out fight with Europe at a time when its trade conflict with the United States continues.
Some argue the agreement could backfire on the EU. The deal came just after France and Germany demanded new trade defense tools, including restrictions on market access, to respond to the influx of Chinese goods. By showing a willingness to make some concessions, the reading goes, China has gained grounds to block further hard-line EU measures. An EU official who requested anonymity told Euronews that it was a fairly good agreement but expressed concern that the European Council might let its guard down. Bloomberg also noted that China expects the deal to help it avoid tougher EU regulation.
Another limitation is that the agreement alone will do little to resolve the EU's entrenched goods trade deficit with China across industries. Last year the bloc's goods trade deficit with China came to about 360 billion euros, averaging 1 billion euros a day. Electrical and electronic equipment accounted for the largest shortfall at 136.9 billion euros, followed by machinery at 61.2 billion euros and chemicals at 15 billion euros. The automotive deficit, by contrast, was relatively small at 13.5 billion euros.
Joe Peissel, senior economist at Trivium China, a research firm specializing in China, said Beijing had won a striking diplomatic victory. "Apart from autos and a small tariff reduction, this 16-point agreement contains nothing that fundamentally reshapes trade terms between China and the EU," he said.