EU starts review of more sectors for China import quotas

The European Commission has started reviewing trade data for import surges in sectors including chemicals and machinery. This is the first step toward safeguard measures, such as quotas, on more goods from China and other countries, Bloomberg reported on Thursday, October 15, citing a person familiar with the matter. If the Commission finds a surge, it can use safeguards to limit how much of a product comes in.bloomberg.com

The review follows the EU's deal to cap Chinese hybrid car imports. It also coincides with a two-day EU leaders' summit in Brussels, starting October 15, where the bloc's response to rising Chinese exports is on the agenda, El Confidencial reported.theedgemalaysia.com

Berlin wants more caps

Germany will press the EU to quickly put quotas on Chinese chemicals, mechanical engineering and possibly pharmaceuticals, using the hybrid-vehicle cap as a model, Bloomberg Law reported, citing people familiar with the matter. Berlin wants the Commission to present proposals by the end of the year. German Chancellor Friedrich Merz and French President Emmanuel Macron want leaders to give the Commission a mandate for tougher trade measures, according to the same report.news.bloomberglaw.com

The EU has said it will cap Chinese hybrid imports at 350,000 vehicles a year from December, less than half of this year's expected total, The Edge Malaysia reported, carrying Bloomberg News reporting. Brussels has also flagged furniture and scooters as products where Chinese imports threaten local manufacturers. The EU's trade deficit with China hit a record $34.8 billion in September. "It's clear that those economic and trade imbalances are not limited to automotive," Valdis Dombrovskis, the bloc's top economic official, said in Bangkok on Tuesday, October 13, the report said.theedgemalaysia.com

Beijing warns of response

China's Commerce Ministry spokesperson He Yadong said on Thursday that Beijing opposes the use of "supposed overcapacity" to justify protectionist steps. "If the relevant economies use this as a pretext to adopt measures that harm Chinese interests, China will respond in a firm and necessary manner," he said, according to EFE via El Confidencial. He described the hybrid deal as "reciprocal and mutually beneficial."elconfidencial.com

Chinese analysts see the car agreement as a one-time concession. "This is a special arrangement and will not become a precedent for other sectors," said Tu Xinquan, a former adviser to the Commerce Ministry. He added that if Europe "continues to push its luck, then China has no choice except counterattack," The Edge Malaysia reported.theedgemalaysia.com

Legal hurdles ahead

Tu also said that WTO rules set a high bar for safeguard measures, which gives Beijing room to slow the process down, according to the report. François Chimits of Institut Montaigne expects new measures on chemicals, hybrid vehicles and machine tools by the end of October. In his view, Slovakia and Spain are the main holdouts within the bloc, EU Insider reported.euinsider.eu+1