China and Europe Step Back From Trade War With Limits on Chinese Car Exports

High-level talks in Beijing between the European Union and China ended on Friday with an unexpected agreement that could pull the two sides back from an imminent trade war.

The most notable feature of the agreement involved what both sides described as an understanding on China’s exports of hybrid electric-gasoline cars, which have been among the most contentious points of tension between the two sides.

Maros Sefcovic, the trade commissioner of the 27-nation bloc, said that the understanding could lead to China’s halving the number of hybrid gasoline-electric cars that it sends to the European Union in the next four years. Neither side made any mention of any tariffs on those cars, which China has resolutely opposed.

China’s Ministry of Commerce said in a separate statement that the two sides had “reached an understanding on trade in hybrid vehicles in a manner consistent with World Trade Organization rules.” Complying with those rules makes it difficult for Europe to impose tariffs quickly. Tariffs also make it hard to know how many cars will continue to arrive from China, but Mr. Sefcovic said that the understanding would achieve specific reductions in imported cars.

Article source: https://www.nytimes.com/2026/10/09/business/china-european-union-trade.html