The Eurofile Live: Are Europe and China on an Economic Collision Course?

The EU-China hybrid vehicle deal is a limited truce, not resolution, with further trade escalation likely bounded by China's rare-earth leverage.

• Hybrid deal details: EU-China agreement caps hybrid vehicle imports at 350,000 units (roughly half 2026's estimated imports), rising 6% annually for four years, applied globally not just to China.
• Export surge drove the shift: Chinese exports to Germany and France rose 200% and 250% year-on-year as of September data, alongside mass Volkswagen layoffs and deindustrialization fears.

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