10% vs 45% Tariff Gap: Why Hybrid Vehicles Are the EU’s New China Trade Focus
The EU plans to extend trade restrictions from pure electric vehicles to hybrid vehicles. The Financial Times reports that the EU is seeking to negotiate a voluntary limit by China on hybrid vehicle exports to Europe, and may impose additional tariffs if no agreement can be reached. Currently, Chinese-made hybrids are subject to a 10% tariff on exports to Europe, while pure electric vehicles face up to about 45%. EU imports of hybrids from China rose from 3,800 units in October 2024 to 50,000 in July 2026, with average prices falling over the same period. The EU's trade deficit with China is about 1 billion euros a day on average, and Trade Commissioner Sefcovic is expected to visit China in October for consultations; the outcome of the negotiations will affect the cost structure of Chinese automakers in Europe.
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