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Finbarr Bermingham

Midway through a three-month negotiating period with Beijing, new data shows the trade balances of 24 European Union member states are still moving in what Brussels considers to be the wrong direction.
China extended its trade surplus over all but three EU members in July compared to a year earlier, calculations based on new Chinese customs figures showed. In some instances, the monthly swing was dramatic.
China’s surplus with Sweden quadrupled, while for Malta it rose by 166.6 per cent. For Romania it expanded 94.4 per cent, and for Finland 93.7 per cent.
For the bloc’s biggest economies, Germany’s deficit shot up 86.5 per cent compared to July 2025, Poland’s was up 31.9 per cent, the Netherlands rose 14.5 per cent, Spain by 12.4 per cent and France by 4.2 per cent.
Following a meeting between the sides’ respective trade chiefs at the end of June, Brussels set a three-month deadline for a rebalancing of trade ties, amid fears that cheap Chinese imports are helping to deindustrialise swathes of the European manufacturing economy. After this point, it has pledged to take action to redress things.


While the bloc’s officials are not entirely fixated on trade deficits, they have become a symbol of concerns about undeclared Chinese state subsidies and industrial overcapacities that have spilled over from spreadsheets to open geoeconomic rivalry.
On Thursday, European Central Bank (ECB) President Christine Lagarde bemoaned the “erosion” of Europe’s mid-tech manufacturing, which is described as a “pillar” of European economic strength.
“That advantage is also being eroded,” Lagarde said at an event in Geneva.
“China has been steadily moving up the value chain. The country now competes directly with the euro area in close to 40 per cent of the sectors in which we have a comparative advantage, compared with around 25 per cent in the early 2000s.”
She also acknowledged that the manufacturing recession was partly attributable to the recent lack of “access to relatively cheap energy”.
An ECB report published this month found Chinese industries receiving more state support also tended to export more, though it cautioned that subsidies alone did not explain China’s overall trade surplus. The report added fuel to what has become a fiery debate about Beijing’s policies.
“Trade imbalances in strategically important industries such as solar technology, semiconductors and automobiles can put employment and industrial capacity in trading partners under pressure,” the report read.
Next month, European Commission President Ursula von der Leyen is expected to announce new measures aimed at rebalancing ties with China, which will then be debated by national leaders at a summit in Brussels in October.
The latest Chinese data showed that on one count at least, recently imposed EU restrictions are having a major impact.
Chinese exports of low-value goods to the bloc fell by 54 per cent in value terms in July and 40.8 per cent in volume terms in July, after a new tax of €3 (US$3.50) was slapped on all packages worth less than €150 (US$175) coming from outside the EU from July 1.
The tax was imposed after postal services were overwhelmed by the number of orders from Chinese e-commerce giants including Shein and Temu, while policymakers were also concerned about the lack of safety and standards checks taking place on the platforms.
Shipments of these items fell by 78.1 per cent in France, 64 per cent in Spain, 58.9 per cent in Germany and 51.2 per cent in Italy, respectively, compared to a year earlier, suggesting that customs restrictions can be effective in cases of price elasticity.


In other areas, EU measures have been less effective. Despite anti-subsidy duties slapped on Chinese-made electric vehicles in October 2024, trade in the cars continues to boom.
In July alone, EV exports to France soared 365.5 per cent, while the figure was 530.9 per cent in the Netherlands. In Hungary shipments soared 618 per cent, and they were up 329.4 per cent in Spain.
Germany, Europe’s automotive hub, brought in 40.8 per cent more EVs from China in July than a year earlier, with the EU-wide increase coming in at 82.8 per cent.
Shipments of plug-in hybrid EVs, meanwhile, rose 118.3 per cent to the 27-member union in July, including a 1,018 per cent increase in France and a 303.3 per cent rise in the Netherlands.
Brussels has mulled investigating subsidies in this sector too, though it is understood that media reports in June of an imminent probe were premature.
After talks between Chinese Commerce Minister Wang Wentao and EU Trade Commissioner Maros Sefcovic in June, sources said Wang was open to exploring ways to reduce China’s surplus, including through purchase agreements covering European goods.
The discussions touched on lowering tariffs on EU-made goods, in a rare sign that China recognises that its billion-euro-a-day trade surplus has become a political problem.
Talks have continued at the working level over summer, with few of the barbs and threats that have come to define the prickly trade relationship in recent years.
On Thursday, however, Beijing blocked firms from complying with a foreign subsidies probe into Chinese e-commerce giant JD.com’s takeover of Ceconomy, a German retail behemoth, suggesting that it would not allow Brussels’ legislative moves to pass unanswered.
It marked the second time China had used its new blocking statute, with the first occasion also coming in an EU subsidies probe, against airport scanner company Nuctech in May.
Describing the case as “improper extraterritorial jurisdiction”, China’s Ministry of Justice warned that “if the EU persists in its unilateral actions, China will resolutely retaliate in accordance with the law”.


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As Brussels continues its push to rebalance ties, the latest data show China’s trade surplus expanded over all but three EU members in July


As Brussels continues its push to rebalance ties, the latest data show China’s trade surplus expanded over all but three EU members in July.


China’s trade grip tightens in Europe as clock ticks towards October deadline

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}As Brussels continues its push to rebalance ties, the latest data show China’s trade surplus expanded over all but three EU members in July

As Brussels continues its push to rebalance ties, the latest data show China’s trade surplus expanded over all but three EU members in July