China Agrees to Halve Hybrid Car Exports to the European Union
The deal “opens the prospect of cutting China’s export of hybrids by more than a half”, the EU trade commissioner Maroš Šefčovič said in Beijing — several million vehicles over four years. “It is the first time that China has accepted to moderate its exports without going through the phase of prior trade tension.” Talks continue on rare earths.
The pressure behind it is a trade deficit running at €1.18bn a day and, in Mr Šefčovič’s words, “literally thousands of job losses” at risk in European manufacturing. The agreement runs to sixteen points and he is careful not to oversell it: “This is far from the end. It’s a crucial first step, but only a first step.” He briefs European Union diplomats on Sunday before a leaders’ summit on Thursday. The clause with the most direct consequence for British industry is not about cars at all. China’s commerce ministry says it is “willing… to continue facilitating the approval of export licenses for rare earths and permanent magnets destined for the EU” — the materials that go into electric motors, wind turbines and guided weapons, and the choke point Beijing has used as leverage all year. Britain is outside this arrangement, which is the awkward part: a deal that eases supply into the single market does not automatically ease it into the United Kingdom, and the question of whether British manufacturers end up buying rare earths through European intermediaries is now a live one. A trade war on the other side of the Channel has been postponed rather than resolved.