Forcing China to "voluntarily restrict" car exports? Chinese side: Firmly opposed, EU's relevant actions seriously violate WTO rules

The European Union is recently considering a series of trade restrictions targeting China, expanding the scope from purely electric vehicles to hybrid vehicles, steel, and downstream products, raising concerns about China-EU economic and trade relations and supply chain cooperation.

According to Reuters, the EU stated on the 18th that it will implement import quotas and minimum price measures on electrical steel and its downstream products to protect the EU from the impact of low-priced imports mainly from Asia. The Financial Times reported on the 17th that the EU also asked China to "voluntarily restrict" hybrid vehicle exports, seeking a commitment from China to limit the market share of China-made hybrids in the EU to about 15%, while the current share has already exceeded one third.

In response to the EU's moves, a spokesperson from China's Ministry of Commerce stated on the 18th that so-called voluntary export restrictions seriously violate World Trade Organization rules and go against market economy principles and fair competition. China firmly opposes this. The spokesperson emphasized that any solution between China and the EU must ensure a balance of interests, comply with WTO rules and respective domestic laws, and fully consider the interests of both industries.

In contrast to the EU's escalating restrictions, the UK has not followed the EU in imposing additional anti-subsidy tariffs on Chinese-made electric vehicles.

The Daily Telegraph reported on the 17th that Jonathan Reynolds, the UK's Secretary of State for Business and Trade, recently stated that the UK cannot simply protect its own automotive industry by imposing tariffs on Chinese electric vehicles, as this could prompt retaliation from China and harm UK exports to China. Reynolds said that when considering the introduction of new trade barriers, the UK's own interests come first.

It is worth noting that while the EU is brewing these measures, on the 17th, China's Minister of Commerce Wang Wentao held a video meeting with Maroš Šefčovič, the EU’s Commissioner for Trade and Economic Security, to discuss China-EU economic and trade matters. The EU’s approach of “negotiating while restricting” has made many question its sincerity in resolving economic and trade disputes with China.

Jian Junbo, director of the Center for China-EU Relations at Fudan University, told the Global Times on the 19th that the EU industry faces structural problems such as high energy costs, slow industrial transformation, and insufficient innovation capacity. While trade protectionism may temporarily ease pressure on certain industries, it cannot solve deeper issues.

China is an important part of many EU industrial chains. If European companies cannot continue to obtain cost-advantaged Chinese raw materials, intermediates, and components, they may be forced to look for more expensive alternatives, thereby increasing production costs. This could ultimately damage bilateral trade, consumer interests, and the competitiveness of European enterprises.