China, EU reach breakthrough consensus on Hybrid and EV trade

China and the European Union held "intensive consultations" on the trade of hybrid and electric vehicles, as well as efforts to balance economic and trade concerns.

The commerce ministry said on Monday, both sides agreed on hybrid vehicles as the export quota given to China would not be lower than quotas allocated to other imports sources.

They also agreed on the fact that EU measures must not specifically target the country's products or discriminate against its firms.

European officials have faced intense pressure to protect domestic manufacturers from surging low-cost imports, while Beijing has continuously pushed for fair treatment under World Trade Organization rules and relief from rigid countervailing duties.

As part of the evolving understanding, both sides discussed cooperative mechanisms including company-specific price undertakings to manage market competition without triggering a full-scale trade conflict.

Both China and EU also agreed on an upward adjustment of hybrid vehicle exports based on the 2025 figures to ensure opportunities and stable growth for Chinese enterprises, the ministry added in its statement.

The recent dialogue forms a crucial part of broader discussions that also touch upon strategic supply chains, including critical rare earth materials and agricultural market access.

While negotiators have successfully averted an immediate escalation, industry analysts note that final implementation hurdles remain.

Both economic superpowers have signaled a commitment to keeping communication channels open, balancing green transition goals with the protection of domestic industrial bases as long-term trade terms are hammered out.