European Union Caps Hybrid Vehicle Imports to Reduce Trade Deficit

The European Union will implement a safeguard measure on December 1 to cap hybrid vehicle imports at 350,000 cars per year. This initial limit will increase by 6% annually starting in the second year and will remain in effect for four years.

The decision follows a meeting in Beijing between EU trade chief Maros Sefcovic and Chinese Commerce Minister Wang Wentao. The measure aims to reduce a trade deficit that currently exceeds 1 billion euros per day and prevent subsidized, low-cost Chinese goods from eroding local industry.

To comply with World Trade Organization non-discrimination principles, the cap applies to all hybrid imports, though the quota for China will be no less than that of any other source. EU leaders are scheduled to meet in Brussels on Thursday to further discuss the import cap and broader strategies for industrial protection.