AI-generated illustration

European Union Trade Commissioner Maros Sefcovic said after meeting Chinese Commerce Minister Wang Wentao in Beijing that the two sides had reached a common understanding aimed at rebalancing EU-China trade. Writing on the social media platform X, Sefcovic described the agreement as a first step.

He said the understanding covers cutting exports of hybrid electric vehicles (HEV) and plug-in hybrid electric vehicles (PHEV) by half, improving access to the Chinese market, and further simplifying export licensing procedures for rare earth elements. Sefcovic welcomed what he called the genuine cooperative effort and sincere approach shown by the parties, and noted that both sides would meet again by January.

Trade tensions have grown recently between the EU and China over tariffs on electric vehicles, trade imbalances and Chinese export restrictions on rare earth elements. The EU has pressed for the removal of barriers to market access in China and for the security of critical raw material supplies, while the two sides continue negotiations to settle their trade disputes.

Key Takeaways

• EU and China agreed to halve exports of hybrid and plug-in hybrid vehicles, ease rare earth export licensing and improve market access.
• Maros Sefcovic called the understanding a first step and said the parties will reconvene by January.
• Trade tensions persist over electric vehicle tariffs, trade imbalances and rare earth export restrictions.