EU and China strike interim trade deal that could cut Chinese hybrid
exports, EU envoy says
[October 10, 2026] By
SAM McNEIL, KANIS LEUNG and ELAINE KURTENBACH
HONG KONG (AP) — The top trade envoys for China and the European Union
agreed Friday on a broad initial deal following two days of talks aimed
at calming escalating tensions over trade imbalances, the EU trade
commissioner said.
Neither side provided clear details on the preliminary deal, but
European Commissioner for Trade Maros Sefcovic said it includes lower
tariffs for some European goods to China as well as measures to
stabilize rare earth supply chains.
The EU trade envoy said the deal could cut up to 50% of Chinese electric
and plug-in hybrid vehicle imports to the EU and could lower tariffs on
products benefiting “almost every” EU nation. The deal would require
approval from leaders across the 27-nation EU.
He said that “by this step we are actually preventing several millions
of car exports from China to the European Union.”
The two sides were seeking to resolve key factors behind China’s growing
trade surplus, which hit 360 billion euros ($403 billion) last year.
China’s Commerce Ministry posted online that Chinese Commerce Minister
Wang Wentao expressed concerns about the EU’s recent restrictive
measures. He said that China is not the root of the EU’s problems but a
partner in solving them.
The head of the European Automobile Manufacturers’ Association, Sigrid
de Vries, said that the deal appears to avert further instability in the
EU and “can help facilitate the transition to a new era of Chinese
presence in the European market in an orderly way and this is in the
long-term interests of all parties.”
Sefcovic said he will brief EU leaders meeting in Brussels next week and
seek their approval.
“They would have to see that this is convincing enough to take the other
steps,” he said. “We are in a situation that they (China) could put
under the threat whole sectors in the European industry, literally
thousands of jobs and the public opinion and the leaders clearly expect
very fast action from our side.”
Sefcovic also said both sides reached understandings to further
facilitate China's export licensing for rare earths and permanent
magnets, as well as to improve access to the Chinese market for various
EU products through lower most-favored-nation tariffs, including car
parts, olive oil and footwear, totaling almost 4 billion euros (about
$4.5 billion) in current export value.
The two sides will meet next by video in January and then in person in
March.
Growing tensions
China has been pushing for the EU to stop blocking Chinese imports of
advanced computer chipmaking machines, restrictions imposed on national
security grounds at Washington's behest.
Earlier, Sefcovic had said the talks this week were the culmination of
three months of intensive work. He had set an October deadline for
meaningful results on trade rebalancing.
[to top of second column] |
In this photo released by the Xinhua News Agency, Chinese Vice
Premier He Lifeng, right, shakes hands with European Commissioner
for Trade and Economic Security Maros Sefcovic prior to their
meeting in Beijing, Friday, Oct. 9, 2026. (Tian Yu/Xinhua via AP)
 Earlier in the week, the Chinese
Commerce Ministry issued a statement urging the EU to avoid
protectionist measures, warning that such moves could backfire.
Trade tensions have grown in recent months, with both sides imposing
or considering curbs on each other’s imports.
The EU has moved to limit imports of Chinese-made electric vehicles
and EV batteries and enacted measures to protect the European steel
industry. It also is limiting duty-free imports of e-commerce small
parcels, essentially targeting Chinese fast fashion firms.
Last week, China launched an anti-dumping investigation into imports
from the EU of p-nitrotoluene, a chemical compound used in dyes and
pharmaceuticals.
Chinese officials and businesses have raised concerns over reports
some EU members are pushing for new measures to protect local
industries.
China had a global trade surplus exceeding $1 trillion last year
Worries over surging Chinese exports to Europe and other parts of
the world in what some are calling a China shock 2.0 have deepened
as the U.S., especially since U.S. President Donald Trump returned
to the White House, has raised tariffs and enacted other measures to
try to reduce its own huge trade deficit with Beijing.
Despite the backlash from some of its trading partners, China's
global trade surplus hit $1.2 trillion in 2025 and is forecast to
surpass $1 trillion again this year.
The EU's trade deficit with China widened to 103.3 billion euros
(about $116 billion) in the second quarter, as imports rose to 153.6
billion euros ($172 billion), while European exports to China
climbed to 50.3 billion euros ($56 billion), according to EU
statistics.
And on Wednesday, Germany blocked the sale of a major logistics firm
in the port of Hamburg to the state-owned Chinese shipping behemoth
Cosco over security concerns.
“As Europe’s largest economy, Germany welcomes foreign investment.
At the same time, some investments can endanger the country’s
security,” the German economic ministry said in a statement. “The
acquisition would have deepened dependencies and jeopardized the
resilience of supply chains in Germany and the EU.”
____
McNeil reported from Brussels and Kurtenbach reported from Mito,
Japan. AP journalists Borg Wong in Beijing and Chan Ho-him in Hong
Kong contributed
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