EU trade commissioner Maroš Šefčovič leaves Wednesday for two days of urgent talks in China. The mission aims to cut Beijing’s £1bn-a-day trade surplus by limiting exports of cheap hybrid electric cars to Europe. Negotiations begin Thursday and run late into Friday.

Officials hope to reach concrete agreements before EU leaders meet in Brussels on Thursday next week. The proposed deal is a pilot program focused on the automotive sector. If successful, the framework could expand to other industries in the coming months.

Diplomatic efforts to prevent a full trade war started at the end of June. The push follows a sharp rise in Chinese hybrid vehicle sales after the EU imposed tariffs on fully electric models in October 2024. Beijing quickly shifted production to bypass the restrictions.

The EU requested voluntary export limits Last month, warning that quotas could follow if Beijing refused. China has not publicly responded. Meanwhile, member states are hardening their stance, demanding stronger safeguards for domestic manufacturers facing intense import competition.

Germany and France are pushing a major policy change to address the imbalance. On Monday, Chancellor Friedrich Merz joined President Emmanuel Macron to authorize a new trade defense tool. The proposal, dubbed a kill switch, would allow the bloc to restrict single market access within days rather than months. A joint paper warns of a massive industrial shock hitting key sectors like automotive, pharmaceuticals, and aerospace.

Andrew Small, Asia director at the European Council on Foreign Relations, said the negotiations will test the willingness of both sides to reach a serious agreement. He cautioned that “China’s most effective tactic may be to draw Europe into a ‘process trap’ offering just enough to delay action, without addressing the forces driving European deindustrialisation.”