Big news out of Beijing! On Friday, the EU’s trade chief, Maroš Šefčovič, announced a deal that could cut China’s exports of hybrids and plug-in hybrids to Europe by more than half. That’s several million fewer cars over four years. Diplomacy works!*
Here’s some context:
In October 2024, the EU put tariffs of up to 45% on Chinese battery EVs because of the CCP’s massive subsidies. Hybrids, though, still paid only the standard 10%. So what did Chinese automakers do? They switched to hybrids. Chinese hybrid imports went from 3,800 cars in October 2024 to about 50,000 in July 2026.
So the CCP increased its hybrid exports more than tenfold to get around the EU’s rules. Now it’s “agreeing” to cut them in half. And Brussels is calling that a win. Because the EU is run by a clumsy bureaucracy—and that’s me describing them generously.
Read the fine print, too. It’s a “shared understanding,” and Šefčovič didn’t say how it will actually be enforced. Meanwhile, the CCP got the EU to keep talking about price undertakings on the EV tariffs, which would mean China agrees to raise its own prices, and then the EU would remove the tariffs.
But the whole thing just shows how absolutely useless Europe’s bureaucracy is when it comes to countering the economic threat of the CCP.
The CCP agreed to back off partway on what it got by exploiting a loophole—the hybrids. And in return the CCP gets a shot at undoing the original EV tariffs that started all this.
See you in 2027, Europe, when the CCP finds the next loophole.
And by the way, Europe is wrong about why they should stop Chinese EVs. Bureaucrats think it’s about protecting local industry and manufacturing jobs. But everyone I know who has worked in intelligence agrees: Chinese cars are spy machines. So the optimal number of Chinese cars to have in Europe is zero.
