European Union imports from China have significantly outpaced exports to the country, creating a substantial trade imbalance that is drawing heightened attention from EU leadership and trade officials.
Customs data analyzed by the Mercator Institute for China Studies revealed that the EU’s trade deficit with China reached €36.5 billion in July alone, representing an increase from €32.2 billion in the same month the previous year. For the period from January through July, the cumulative deficit totaled €234 billion, approximately €21 billion higher than the corresponding timeframe in the prior year. The daily deficit averaged €1.18 billion, meaning EU consumers and businesses purchased €3.10 worth of Chinese goods for every €1 of EU exports sent to China.
EU trade officials have identified the imbalance as a priority issue requiring resolution. The European Commission president stated that action must be taken to address the disparity, and the EU’s trade commissioner is scheduled to meet with Chinese counterparts in October to discuss the matter. Potential measures under consideration include implementing quotas on hybrid vehicles and specific chemical products originating from China. Hybrid vehicle imports have grown substantially, increasing tenfold between October 2024 and July 2026, after tariffs on Chinese electric vehicles omitted these vehicles from coverage.
China has maintained a diplomatic approach in response to EU concerns, emphasizing that any resolution must balance the interests of both sides, comply with international trade rules, and protect domestic industries. The country has previously warned of readiness for trade conflict but has not escalated rhetoric ahead of planned discussions. Additionally, negotiations regarding China’s rare earth export restrictions, which were implemented in April 2025 and temporarily suspended, remain part of broader trade negotiations affecting multiple regions including the EU, Mexico, and the United States.
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