A first step, but no real rebalancing in the European Union’s trade deal with China

According to Bruegel, EU Trade Commissioner Maroš Šefčovič returned from the 8-9 October EU-China Trade and Investment Consultations in Beijing with three 'shared understandings'[2]. Bruegel reports he also declared: "This is far from the end."[2]Bruegel says the EU's headline gain is a 'shared understanding' with China on reducing Chinese exports of hybrid and plug-in hybrid-electric vehicles[2]. However, the think tank notes that Europe's bilateral trade deficit with China is €360 billion, and Chinese automotive exports to the EU are worth around €15 billion.[2]Euronews, citing the European Commission, reports that the EU also secured tariff liberalisation for car parts, footwear, ice cream and olive oil, saving at least €225 million in duties[3]. Bruegel says the third understanding is the creation of a 'green channel' to facilitate licences for rare earths and permanent magnets.[1]Bruegel argues that the Chinese readout makes it clear that the softening of export controls must be reciprocal.[2] It also reports that Beijing also secured a technical dialogue on the EU Foreign Subsidies Regulation[2].According to Bruegel, China's main interest is preventing the European Council from implementing its trade tools[1]. An anonymous EU official told Euronews: "It is quite a good deal, but I am afraid it might create relaxation at the European Council"[3].Euronews reports that Šefčovič is due to hold a video call with his Chinese counterpart in January, followed by another round of political talks in March.[3]