EU and China weigh next sectors for trade curbs

EU and Chinese officials are currently deliberating over additional sectors to address in trade negotiations, as Brussels anticipates reviewing the implementation of their recent agreement in January, according to EU Trade Commissioner Maroš Šefčovič. The October 9th pact saw China pledge to cut hybrid vehicle exports to the EU by nearly half to 350,000 units by 2027, while also lowering tariffs on EU goods such as auto components and footwear. Šefčovič expressed optimism about achieving progress during their next round of talks in March 2027.

The intense collaboration with China stems from the EU's efforts to rebalance economic ties, which the bloc claims have been skewed by Chinese subsidies, market restrictions, and imports. The EU's trade deficit with China nearly reached €197 billion in the first half of 2023, threatening to surpass the 2022 record of €397.3 billion. Šefčovič emphasized the urgency, noting that part of their team focuses on executing the agreed-upon measures while another group negotiates with Chinese counterparts to determine the next sectors of focus.

The Commission is exploring shielding more sectors from Chinese overcapacity, with plastics emerging as a top candidate for safeguard measures. Additionally, Brussels is grappling with requests from its 27 member states to protect industries crucial to their economies, such as chemicals and machinery. The European Commission aims to introduce new trade tools to encourage EU companies to diversify suppliers, with plans to present them in early December. Šefčovič also mentioned a proposal by France and Germany for a rapid restriction tool, which Brussels could utilize to address countries severely distorting the EU's single market.