China and the European Union have found a small space for understanding amid a deepening trade dispute. After two days of negotiations in Beijing, the European Commissioner for Trade, Maros Sefcovic, and the Chinese Minister of Trade, Wang Wentao, have reached an agreement in principle on trade in hybrid vehicles that, according to the Chinese Ministry of Commerce, complies with the rules of the World Trade Organization (WTO).
It is a discrete advance, of which no further details have been revealed, in an economic relationship that has become a permanent source of friction, although it remains to be seen whether the compromise will serve to correct the imbalances that Brussels denounces.
The document also ensures that both parties will continue to "explore the reduction of tariffs and price commitments for electric vehicles."
Sefcovic had arrived in the Chinese capital with a complicated mission: to convince the world's second largest economy that it should sell less to Europe or, at least, allow European companies to compete in more balanced conditions. His trip came after months of technical negotiations and with a deadline set for October. The commissioner needed to return with concrete results before the meeting of European leaders in Brussels, scheduled for next week.
Behind the conversations is a figure that has become the obsession of European leaders: almost 1 billion euros a day. It is the approximate size of the EU's trade deficit with China, which reached 359.9 billion euros in 2025. For Brussels, the problem is not only that China sells much more than it buys, but that its manufacturers benefit from subsidies, public financing and a productive capacity that far exceeds domestic demand. Beijing rejects these accusations and attributes its export strength to the competitiveness of its companies.
The automobile has become the main battlefield. After the European tariffs imposed in 2024 on electric cars manufactured in China, Asian producers accelerated exports of hybrids, which were outside those measures.
According to data collected by Global Trade Alert, these vehicles went from representing 7% of cars imported from China in 2023 to 39% during the first half of 2026. Before the Beijing meetings, the Financial Times reported that Chinese authorities had rejected a European proposal to voluntarily limit these exports.
But the problem goes far beyond cars. Machinery, chemicals, steel and batteries are part of an industrial offensive that is changing the economic balance between both powers. For decades, large European multinationals found an immense market in China to sell technology and automobiles. Now they face Chinese competitors capable of competing for customers both inside and outside the Asian giant.
The concern has sparked significant political change. This week, Emmanuel Macron and Friedrich Merz asked Ursula von der Leyen for a new instrument that would make it possible to quickly restrict the access of foreign products to the European market when there are serious distortions. The turn of Germany, traditionally reluctant to confront Beijing over the interests of Volkswagen, BMW and Mercedes in China, is especially relevant.
The pressure also comes from the European factories themselves. On the eve of the meeting, 44 industrial organizations, including representatives of the steel, aluminum, chemical industry and automotive components, demanded that European governments accelerate anti-dumping investigations, strengthen Brussels' trade defense teams and create new tools against distortions caused by state aid. They warn that the continent is losing competitiveness between high energy costs and the arrival of Chinese products at artificially low prices.
