EU Asks China to Voluntarily Curb Hybrid Car Exports — or Face New Tariffs

The European Union has asked China to voluntarily limit its exports of hybrid vehicles to Europe. If Beijing refuses, the EU is threatening to impose higher tariffs on Chinese cars, according to a British publication citing an unnamed EU official.

"If they don't limit exports to our market, we will do it ourselves. This is about halting deindustrialisation. We have to act," the anonymous EU official said.

Trade deficit hits record levels

The growing volume of hybrid car imports from China is deepening the troubles of European automakers, which are already cutting costs and laying off staff. In her annual State of the Union address, European Commission President Ursula von der Leyen said the EU would use every tool at its disposal to reduce its trade deficit with China, which she described as having reached an unacceptable level.

According to the European Commission, the EU's trade deficit with China stood at €360.6 billion (roughly 8.77 trillion CZK) last year, and grew by a further nine percent in the first half of this year. Von der Leyen believes the situation has reached a critical point, with Europe facing what she called a second "China shock" driven by deindustrialisation.

EU Trade Commissioner Maroš Šefčovič, who is leading talks with China on correcting the trade imbalance, hopes to see concrete results as early as October. He plans to travel to Beijing next month to continue the negotiations.

Brussels argues that the surge in Chinese exports — particularly of chemicals, batteries and cars — stems from overcapacity among Chinese manufacturers. Beijing disagrees, arguing that claims of imbalance and overproduction are merely a pretext for protectionist measures aimed at curbing the competitiveness of Chinese firms, according to Reuters.

Volkswagen to cut up to 100,000 jobs

Europe's auto industry has been grappling with a string of challenges lately, including intensifying competition from China, high production costs, excess capacity and US tariffs.

Earlier this month, the supervisory board of German carmaker Volkswagen approved the largest restructuring plan in the company's history. Among other measures, Volkswagen intends to cut up to 100,000 jobs worldwide by the end of the decade and reduce its model lineup. The group employed roughly 663,000 people worldwide at the end of last year.

Volkswagen's brands include Czech carmaker Škoda Auto, which has repeatedly stated that the group's new transformation plan will not have a direct impact on its operations.

Source: novinky.cz