The China-EU trade talks have now wrapped up, with both sides issuing a joint statement. China also released a separate press readout. The Chinese and EU accounts of the talks can be found at the following links:
EU’s readout on the Second China-EU Trade Talk
The EU’s official texts have now been released, and they clearly support some of the assessments I made in my previous article: the two sides reached an understanding that also includes arrangements to restrict Chinese hybrid vehicle exports.
China’s readout on the Second China-EU Trade Talk
We still need to read this alongside the EU’s readout, but my initial impression is that the negotiations have produced a meaningful, albeit partial, easing of tensions. The risk of a near-term escalation in trade and economic disputes may now be somewhat lower. The most significant developments are the understanding on hybrid vehicles, reciprocal facil…
China’s main message during these talks was that the two sides should stabilise their economic and trade relationship, respect each other’s interests, and work towards a more balanced trading relationship by expanding cooperation. Minister Wang Wentao also raised concerns about some of the EU’s recent restrictive measures, stressing that China is not the source of the EU’s problems, but a partner in finding solutions.
Maroš Šefčovič had a somewhat different focus. His main priorities were to reduce the EU’s trade deficit with China and protect European industries. He repeatedly stressed that the negotiations needed to deliver concrete, measurable results. Both sides want a more balanced trading relationship, but the EU has made clear that restraining the growth of certain Chinese exports is also part of its approach.
The joint statement published by the EU is broadly consistent with the 16-point list released by China. However, Šefčovič’s separate post-meeting statement and his subsequent exchanges with journalists revealed considerably more detail.
Hybrid vehicles were one of the more important, and somewhat unexpected, outcomes of the negotiations. The Chinese statement simply said that, following intensive consultations, the two sides had reached an understanding on trade in hybrid vehicles in a manner consistent with WTO rules. The EU’s joint statement used similarly general language.
But Šefčovič was much more specific at the press conference. He said the two sides had reached a common understanding on moderating Chinese exports of hybrid and plug-in hybrid vehicles to the EU, which could reduce those exports by more than 50%.
This does not mean cutting current export volumes in half. When pressed by journalists, Šefčovič explained that the EU was comparing projected exports over the next four years under the proposed measures with what exports would otherwise have been if existing policies remained unchanged. According to the EU’s estimates, the difference could amount to several million vehicles. In other words, the EU wants this arrangement to substantially reduce the projected growth of Chinese hybrid vehicle exports to Europe over the coming years.
Judging from Šefčovič’s answers, the two sides appear to have discussed the proposed arrangement in considerable detail. He said that the figures, parameters, expected outcomes and methods of implementation had all been thoroughly discussed. The EU knew what it wanted to achieve and how it intended to get there. He described the arrangement as a negotiated solution, adding that China understood the pressures facing Europe’s automotive industry and jobs. He also said that the European Automobile Manufacturers’ Association had welcomed the outcome.
What remains unclear is exactly how these export restrictions would work. Journalists repeatedly asked whether the EU would introduce safeguard measures, whether the arrangement might resemble the settlement of the earlier China-EU solar panel dispute, or whether China would decide which companies could sell vehicles in Europe. Šefčovič did not give a direct answer. Instead, he said the details would be disclosed after EU leaders had reviewed the agreement.
For now, we can say that the two sides have negotiated an arrangement aimed at limiting future export growth, and that the discussions have been quite detailed. But we still do not know whether the final arrangement will involve safeguard measures, tariff-rate quotas, pricing arrangements, or some combination of these tools. We will have to wait for the official documents.
There was little progress on battery electric vehicles (BEVs). Both sides simply agreed to continue the procedures for company-specific price undertakings and reviews. When asked about specific prices and timelines, Šefčovič provided no new figures. He only confirmed that the EU’s guidance on price undertakings, issued in January 2026, remained valid. The existing countervailing duties have not been lifted across the board, and the two sides have not announced a new minimum price applicable to all Chinese automakers.
On tariff reductions, the EU disclosed more details than were included in the joint statement. Both the Chinese list and the EU’s joint statement merely said that the two sides would continue exploring the possibility of reducing tariffs on certain products.
However, Šefčovič said that the two sides had reached a common understanding on improving market access for certain EU products through reductions in China’s most-favoured-nation (MFN) tariff rates. He mentioned automotive components, olive oil and footwear as examples. These products account for nearly €4 billion in current EU exports to China, and the proposed reductions are expected to save at least €225 million in tariffs annually. These are fairly specific figures, although the exact tariff adjustments and implementation timetable have yet to be clarified.
Export licensing for rare earths and permanent magnets was another outcome that the EU placed particular emphasis on. The two sides gave broadly consistent accounts of this issue. China agreed to continue facilitating export licences for rare earths and permanent magnets destined for the EU through the existing green channel.
Šefčovič identified this as one of the three main achievements of the negotiations. He explained that the fast-track mechanism had already been established, and that the aim now was to make the licensing process more transparent and predictable, and easier for European companies to use.
There was also some progress on other export control issues. The EU agreed to work with the competent authorities of its Member States to help resolve priority cases involving licences for exports of dual-use items to China. This coordination could make a practical difference for Chinese companies waiting for licences to import European technologies or products. The two sides also discussed the possibility of establishing more stable, longer-term facilitation arrangements, although these ideas are still at the exploratory stage.
On export control listings and delisting procedures, the two sides agreed to provide advance notification before adding entities to control lists, improve transparency, and support delisting procedures within their respective legal frameworks. China placed particular emphasis on initiating delisting procedures, while the EU’s joint statement also referred to supporting relevant steps. This creates an additional channel for discussing individual listing cases in the future.
On market access for medical devices and agricultural products, the talks produced several concrete follow-up actions. China agreed to organise a procurement matchmaking event for EU medical devices during the ninth China International Import Expo. It will also accelerate the recognition of regionalisation arrangements for eligible EU Member States, based on risk assessments, and continue discussions on lifting certain restrictions on agricultural imports related to bluetongue disease. On cosmetics, pharmaceuticals and computer reservation systems, the two sides agreed to continue regulatory consultations and technical exchanges.
There was no substantial breakthrough on the Foreign Subsidies Regulation (FSR) or the inverter issue. The Chinese readout identified EU financing restrictions affecting inverter projects as a concern that still needs to be addressed. The EU’s joint statement, meanwhile, stressed that the relevant guidance on the use of EU funding was not directed at any particular country. Both sides agreed to continue discussions, but the EU did not announce any withdrawal of the relevant financing conditions.
The situation with the FSR is similar. The two sides agreed to hold technical discussions, but there was no announcement of any suspension or termination of specific investigations. On intellectual property, they agreed to establish interim milestones, with the existing working group monitoring progress. Investment cooperation and WTO reform will also remain subjects for further discussion.
China wants the agreed outcomes to be implemented as soon as possible. Šefčovič, however, said that the proposed arrangements would first need to be submitted to EU leaders for assessment, potentially as early as October 15. If approved, the EU hopes to begin the relevant procedures quickly. He also expected that the first common understanding would already be under implementation by the time the two sides meet again in January 2027.
The two sides have agreed to hold a ministerial-level video conference in January and convene the third meeting of the consultation mechanism in Europe in March. Šefčovič also made clear that the EU would continue to use its existing policy instruments if dialogue failed to deliver the expected results.
Judging from the details released by the EU, China appears to have made significant concessions on several issues. Whether these concessions will lead to corresponding adjustments by the EU on trade restrictions and market access remains to be seen over the coming months.
