NYT: "Maros Sefcovic, the trade commissioner of the 27-nation bloc, said that the understanding could lead to China’s halving the number of hybrid gasoline-electric cars that it sends to the European Union in the next four years." This may seem like a victory, but the problem is a systemic one, and not sectoral. Because this agreement does not in any way address either China's demand imbalance or the overall role of the EU in absorbing that imbalance, it won't have much effect on overall EU manufacturing. All that will happen is a shift in the locus of net manufacturing imports from China, so that EU producers of hybrids will be better off, but at the expense of other EU manufacturers. For historical reasons, trade discussions are usually held on a product-by-product basis, but while that may make sense in a world of broadly balanced trade, it makes no sense in a world of deep, persistent imbalances. China runs huge surpluses not because it produces too many hybrids but rather because of its deep consumption imbalance and the very low household income share of GDP. As long as that happens, the only recourse for the EU, if it does not want to accept deindustrialization, is either to reduce its own household share of GDP (which would be politically disruptive as well as bad for the global economy) or to intervene in its external accounts in such a way that it reverses the competitive impact of China's low household share of GDP. nytimes.com/2026/10/09/busin…