The European Union will cap imports of hybrid vehicles from China to 350,000 a year, a senior EU official said on Monday after Brussels and Beijing agreed to moderate their entry to the bloc. "This will cut by more than half the current exports to the EU, which we estimate are likely to reach up to 800,000 units in 2026," the official said. The cap will apply from 2027 for a period of four years, rising by six percent annually from the second year onwards. The EU will use its safeguard measure, which allows the bloc to limit imports to stop the flood of a certain product to Europe. The subject of hybrid vehicles is sensitive because these models have become one of the main routes through which Chinese manufacturers enter the EU market. The EU in 2024 set hefty additional tariffs on Chinese electric cars, alleging they benefit from unfair state subsidies. Beijing and Brussels agreed to "moderate" China's exports of hybrids and plug-in hybrids to the EU last week, but details of the plan were not immediately made public. The Commerce Ministry in Beijing said on Monday that Europe imported 302,000 hybrid vehicles in 2025 and that last week's deal would be based on such levels. According to Chinese customs data, such exports to the EU tripled to US$7.5 billion in the first half of this year from US$2.5 billion a year earlier. The ministry ⁠said in a statement the talks were part of efforts to balance broader economic and trade ⁠concerns. The consensus "strongly safeguards ‌the practical interests of Chinese enterprises, avoids escalation of China-EU trade frictions, and provides both ‌sides with a stable, predictable, and sustainable trade and investment environment," it ⁠added. Both sides agreed that the export quota on hybrid vehicles for China would not be lower than quotas allocated to other import sources ‌and that EU measures must not specifically target its products or discriminate against its firms. Both also agreed on an upward adjustment of hybrid vehicle exports from 2025 figures ⁠to ensure ‌opportunities and stable growth for Chinese enterprises, ‌the ministry added in its statement. "The two sides reached a rising arrangement based on 2025, ensuring export space and stable growth for Chinese enterprises," the ministry said. The agreement was struck on Friday after European trade commissioner Maros Sefcovic held two days of talks in Beijing to avert a damaging trade war. The export deal will be on the agenda of a meeting of EU leaders on Thursday, during which they will explore what next steps Europe should take. (AFP & Reuters) Edited by Edmond Fong