The European Commission aims to apply temporary hybrid-car safeguards in early December as trade tensions mount, following a Franco-German joint letter urging faster trade enforcement and a massive bilateral goods deficit that reached almost €197 billion in the first half of 2026.
European trade policy toward Beijing is shifting from broad investigative caution to targeted restriction. Trade Commissioner Maroš Šefčovič announced that the European Commission plans to introduce temporary restrictions on hybrid-car imports in early December. The measures arrive on the heels of intensive bilateral consultations that produced a voluntary understanding in Beijing, under which China agreed to reduce its hybrid vehicle exports to the European market to approximately 350,000 vehicles by 2027.
Yet that diplomatic arrangement has failed to quell domestic pressure in Europe. French President Emmanuel Macron and German Chancellor Friedrich Merz sent a joint letter to European Commission President Ursula von der Leyen in early October, calling for a swift mechanism to restrict access to the single market in the face of persistent market distortions. While Berlin insists it wishes to avoid an outright trade conflict, the political alignment between France and Germany has forged a united front across EU member states.
Bilateral Trade Imbalances and the €197 Billion Deficit
The push for defensive tools is driven by deepening economic asymmetry. For the European Union as a whole, the goods deficit with China reached around €360 billion in 2025. That imbalance has accelerated sharply; the bloc’s goods deficit with Beijing reached almost €197 billion in the first half of this year alone, running at roughly €1 billion a day and threatening to eclipse the record deficit of €397.3 billion set in 2022.
German trade data reflects the same downward trajectory for European exporters. Germany’s exports to China fell 9.7% in 2025 while imports climbed 8.8%, leaving a bilateral deficit of €89.3 billion. In the first five months of 2026, German exports dropped another 14.5% year-on-year, with the automotive sector hit especially hard.
Plastics and Chemicals as the Next Targets for Safeguard Measures
With hybrid vehicles addressed through preliminary caps, trade officials are already evaluating subsequent industrial sectors. Šefčovič identified plastics as the closest sector for potential safeguard investigations, noting that a request for protective measures against PET imports had been submitted earlier in the month. The European Commission is examining whether legal and economic criteria have been met to launch formal trade defense proceedings.
Chemicals, machinery, and pharmaceuticals are also drawing intense scrutiny from member state delegations. Irish Foreign Minister Helen McEntee noted that member states share a clear desire to extend discussions beyond automobiles into wider industrial categories, balancing dialogue with the readiness to deploy defensive trade instruments where local manufacturers face pricing pressure.
The Debate Over Protectionism and European Industrial Competitiveness
The rush toward trade barriers has generated friction among industry leaders and member states. German Chancellor Friedrich Merz told an audience that Berlin wants to avoid a trade war, emphasizing that the newly proposed EU kill switch is intended as a deterrent rather than an active weapon.
Beijing’s Ministry of Commerce cautioned Brussels against extracting concessions through pressure, maintaining that China remains a vital partner rather than the root cause of Europe’s structural economic challenges.
Parliamentary Delegation Visits and Upcoming Negotiations
Diplomatic channels remain active despite the rising trade friction. A delegation of 12 members of the European Parliament’s Committee on International Trade, led by INTA chair Bernd Lange, is scheduled to visit Beijing, Hangzhou, and Shanghai from October 27 to 29. The delegation plans to meet Chinese officials and representatives from the European Chamber of Commerce to examine critical raw material dependencies and market access barriers.
Looking ahead to the winter and spring, the European Commission has established a structured timeline for bilateral review. Officials will hold a ministerial videoconference in January 2027 to assess sectoral priorities, leading directly toward the third formal meeting of the China-EU Trade and Investment Consultation Mechanism in Brussels in March 2027.