European Union reaches agreement with China to limit hybrid car imports

European Union member states have expressed support for a recent agreement with China aimed at limiting the import of plug-in hybrid vehicles into the bloc. The move is part of a broader strategy by the European Commission to rebalance trade relations with China, addressing a trade deficit that the Commission estimates at 1 billion euros per day.

While EU governments support the measure, officials noted that significant work remains to address trade imbalances. The agreement also seeks to facilitate the trade of rare earths and improve Chinese market access for certain European products. EU leadership has emphasized that current imbalances are unsustainable and are placing pressure on domestic factories and industrial employment.

However, the strategy faces criticism from industry leaders. Ola Källenius, CEO of Mercedes-Benz and president of the ACEA, warned that restricting international trade could lead to higher vehicle prices for European consumers due to reduced competition. Källenius urged the EU to pursue more trade agreements with partners such as the USA, Japan, and China rather than closing doors to international commerce.