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

According to Bruegel, EU trade commissioner Maroš Šefčovič came back from the 8-9 October consultations in Beijing with three "shared understandings" and a declaration: "This is far from the end."[1]Bruegel says the main one is an understanding on reducing Chinese exports of hybrid and plug-in hybrid-electric vehicles[1]. It notes that the EU's bilateral trade deficit with China is €360 billion, while Chinese car exports to the EU are worth around €15 billion[1]. China Briefing reports that the deal could set an annual ceiling of 350,000 Chinese hybrid vehicles[2].Bruegel adds that China will cut tariffs on some European products, including car parts, olive oil and footwear, saving some €225 million in duties[1]. It also reports a "green channel" to speed up licences for rare earths and permanent magnets[1].The think tank says Beijing's readout makes clear that any softening of export controls must be reciprocal[3]. In its view, that could limit the EU's most important leverage in trade with China[3].García-Herrero argues that China's main interest is to stop the European Council from using its trade tools[1]. She says that if EU leaders postpone further measures, "this will be China's most important gain."[1]Euronews reports that an EU official said the deal "is quite a good deal, but I am afraid it might create relaxation at the European Council."[4]According to Fortune, the head of the European Automobile Manufacturers' Association, Sigrid de Vries, said the deal appears to head off further instability in the EU[5].