(Reuters) – The European Union has asked China to voluntarily restrict exports of hybrid cars as part of efforts to prevent a trade war, the Financial Times reported on Thursday.
Brussels wants Beijing to limit Chinese hybrid vehicles sales to around 15% of the EU market, the newspaper said, citing people familiar with the matter.
“If they will not limit their exports to our market then we will,” the FT quoted an EU official as saying. “This is about stopping deindustrialisation. We have to act. It’s about managed trade.”
The EU has asked China to limit exports of other products, including chemicals, while seeking increased Chinese purchases of European exports, according to the report.
The EU did not immediately respond to a Reuters request for comment. Reuters could not immediately verify the report.
European Commission President Ursula von der Leyen said on Wednesday that the bloc would use every available tool to reduce what she called its “unsustainable” trade deficit with China.
She said in a speech to the European Parliament the EU’s goods trade deficit with China, which hit €360.6 billion ($413.4 billion) last year and widened by 9% in the first six months of this year, had reached a tipping point and that Europe was already experiencing a second “China shock” through deindustrialisation.
European Trade Commissioner Maros Sefcovic, who is leading talks with China to tackle the trade gap, has said he wants tangible results by October and is expected to visit China by early next month.
The EU says a surge in Chinese exports, including chemicals, batteries and vehicles, has been driven by overcapacity. Beijing rejects that criticism, saying concerns over economic imbalances and excess capacity are protectionist and aimed at constraining China.
($1 = 0.8723 euros)
Reporting by Rishabh Jaiswal in Bengaluru; Editing by Muralikumar Anantharaman and Sonali Paul
