The European Union approved a quota for Chinese cars

China and the European Union (EU) have reached an agreement to limit the import of hybrid cars. From December 1, 2026, the European Union will introduce a quota of 350 thousand cars per year, writes Bloomberg.

This limit will be in effect for the first year. Starting from the second year, it will increase by 6 percent annually. The measures are designed for four years, during which both parties undertake to comply with the rules of the World Trade Organization (WTO).

The restriction will affect all imports of hybrids, not just from China, in accordance with the WTO principle of non-discrimination. The quota for China will be no less than for any other source of import of hybrids. If successful, similar protection mechanisms could be considered for other sectors.

The agreement covers hybrid electric vehicles and plug-in hybrids. It will cover all sources of imports into the EU, including countries with free trade agreements. Members of the European Economic Area, Ukraine, Kenya and developing countries members of the WTO with a small share of imports are exempt from tariffs.

In response, China agreed to eliminate tariffs on some auto parts and halve tariffs on shoes, ice cream and olive oil. These temporary measures will affect exports worth approximately four billion euros. The parties will also discuss easing export controls and licensing, in particular regarding the supply of rare earth elements and permanent magnets.

Safeguards allow the EU to limit the supply of goods from a certain sector when imports surge.