China's Hybrid Car Exports to EU Surge 155% as Bloc Plans New Tariffs

On June 20, China’s exports of hybrid electric vehicles (HEVs) to the European Union surged by 155% year-on-year, compared with a 12% increase in battery electric vehicle (BEV) exports during the same period. The EU believes Chinese automakers are boosting HEV exports to circumvent additional tariffs imposed on BEVs, a development that has become the primary justification for its planned new tariff measures. The European Commission has largely completed preparations to impose countervailing duties on Chinese HEVs and only requires approval from a majority of member states to implement them. Germany, which previously took a cautious stance on such tariffs, has not explicitly opposed the move this time. At a recent EU summit in Brussels, trade and economic restrictions targeting China emerged as a central topic. Senior EU officials repeatedly highlighted the roughly €1 billion daily trade deficit with China, describing the situation as unsustainable. The bloc plans to introduce new regulations aimed at reducing reliance on Chinese supply chains and diversifying sourcing for European companies. Additionally, the EU is considering establishing a new trade instrument similar to the U.S. Section 301, which would allow it to expand the use of trade restrictions—such as tariffs and quotas—citing overcapacity and unfair competition as grounds.