China has rejected an EU request to voluntarily restrict its surging exports of hybrid cars to the bloc as the two sides enter last-ditch talks to avert a trade conflict. The European Commission now hoped to get Beijing to accept a unilateral EU measure to cap hybrid imports instead, two diplomats briefed on the plan said.
European trade commissioner Maroš Šefčovič starts two days of talks in Beijing today and wants to agree at least one measure to reduce China’s ballooning trade surplus with the EU rather than launch punitive measures that could spark a retaliatory spiral. His original pitch was that Beijing agree to limit hybrid vehicle exports to the EU to about 15 per cent of the EU market compared with more than a third today or face retaliatory action such as tariffs. However, EU officials told member states yesterday that China had refused.
The surge in hybrid shipments came after the EU levied anti-subsidy duties on electric vehicles from China of up to 35 per cent on top of the usual 10 per cent rate. Beijing hit back with anti-dumping duties on EU cognac, pork and dairy products. Officials have said the Beijing talks will be a failure if there is no solution to the hybrid cars issue, probably leading to a serious trade conflict since the EU has declared the €1bn-a-day trade deficit to be unsustainable.
Source: Financial Times Companies · Summarized by HeadlinesBriefing