The EU’s trade deficit with China has reached a record €1bn (£0.8bn) a day, according to official trade data, fuelling concerns over the future of Europe’s “industrial backbone”.
The gap between the EU’s imports from China and exports to China amounted to €31.9bn in April, according to the latest import and export data from the EU statistics body Eurostat.
The data comes as European leaders prepare to meet on Thursday to discuss measures to address the growing trade imbalance, which includes the increased presence of Chinese electric cars – exported by a heavily subsidised industry - in Europe and the use of everyday components in factories across the bloc.
The trade expert Rafael Jimenez Buendía, a senior fellow at the Mercator Institute for China Studies, said the trade data for May and June was likely to show that deficit growing further.
“Shipments already recorded by China customs but still at sea and not yet captured by EU customs data suggest that the roughly €1bn-per-day trade deficit is likely to persist in the EU’s May and June figures, to be released in July and August,” he said.
Alexander Julius, the president of Eurometal, the trade organisation representing buyers of steel products, urged EU leaders to wake up to the dangers his members think China is posing to factories across Europe.
“We are really suffering so much, and the politicians are going in completely the wrong direction, and they don’t realise how much the Chinese are destroying the industrial backbone of Europe,” he said.
“If you end up relying on China, China can dictate what parts will be made available to us that we are not producing any more, they will dictate the quantity and the price,” he said, adding that the situation could prove particularly difficult for defence industries.
China’s growing trade surplus with the EU has led to warnings that the bloc could be facing a “China Shock 2.0”, repeating the experience of the US, which resulted in industries being mothballed in what became known as the “rust belt” after Beijing joined the World Trade Organization more than 20 years ago.
The European trade commissioner, Maroš Šefčovič, told a conference in Brussels earlier this month that the deficit had to be addressed.
The European Commission is thought to have discussed several options, with tariffs the least likely option given the “political heavy lifting” involved in getting buy-in.
Another option analysts believe is more viable is quotas imposed on imports of Chinese chemicals and hybrid cars.
Imports of the latter have soared since 2024 when the EU imposed tariffs on electric vehicles but not hybrids.
Beijing has repeatedly rejected allegations of Chinese exporters unfairly benefiting from state subsidies. and last week said it has “never deliberately pursued a trade surplus”.
It has also argued that a “significant share” of the surplus comes from EU companies manufacturing in China and re-exporting to the bloc.
In the run-up to the G7 meeting in Paris, the French president, Emmanuel Macron, has sought to make a last-ditch attempt at a cooperative approach before the EU decides whether to toughen its trade policy towards China.
With China absent from the table, no breakthroughs are expected. France has said acknowledgment that a problem exists is a win in its own right.
The state-owned Xinhua news agency last week said that about half of China’s exports were components that “considerably reduce” costs for EU factories.