A trade war begins? EU plans to impose import quotas on Chinese hybrid vehicles, Beijing retaliates

[Compiled by Wei Guojin/Taipei Report] Bloomberg reported on the 7th that the EU is preparing to take so-called safeguard measures and impose import quotas on China’s imports of gasoline-electric hybrid vehicles to reduce the trade deficit.

People familiar with the matter revealed that the European Commission may impose import restrictions after sales of Chinese gasoline-electric hybrid vehicles surge in Europe. This product currently accounts for 25% of total sales in China. At the same time, the growth of Chinese electric vehicle imports, which is already facing high EU tariffs, has slowed down.

According to reports, the safeguard measures allow the EU to impose import restrictions on related products after a surge in imports of products from a certain industry. The EU can implement this measure through tariff quotas, which impose tariffs on imported products exceeding a certain amount. The EU's proposed import limits will be time-sensitive.

People familiar with the matter revealed that the European Commission plans to use gasoline-electric hybrid vehicles as a test. If successful, it will be extended to other industries where the EU considers trade imbalances.

EU Trade Commissioner Maros Sefcovic will travel to Beijing this week to hold discussions with Chinese Commerce Minister Wang Wentao. People familiar with the matter said the EU plan may be adjusted based on the outcome of talks between the two sides.

Reuters reported that Sefcovic said last week that China’s imports of nearly a quarter of EU products were growing at a worrying rate, including abnormal growth in imports of machine tools, textiles, basic metals and chemicals.

However, EU officials are particularly concerned about the sharp rise in Chinese car imports. In the first nine months of this year, imported plug-in hybrid vehicles have soared by 86%, while prices have dropped by 20%. Electric vehicles grew by 40%, and more than half of these vehicles came from China.

"Yuyuan Tantian", a news account owned by China's state-owned CCTV, warned the European Union on the 7th that if trade tensions between the two sides worsen, China will use various tools such as foreign subsidy investigations and anti-discrimination measures to counterattack.

Zhou Mi, a researcher at the Institute of International Trade and Economic Cooperation of the Ministry of Commerce of China, said that these investigations can assess whether relevant overseas policies affect Chinese companies and whether they create unfair competition, thereby safeguarding the legitimate interests of Chinese companies and reducing the impact of unfair policies and their spillover effects on Chinese industries.

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