The European Union’s trade imbalance with China has reached a record level of one billion euros per day, with all 27 member states now running a deficit for the first time in history.
Unprecedented deficit across all member states
Speaking at the La REF economic forum in France, European Commission President Ursula von der Leyen outlined a sharp deterioration in the bloc’s trade relationship with Beijing, driven by surging imports and declining exports.
According to von der Leyen, European imports from China have grown by 45 percent over the past five years, while EU exports to China have been shrinking. The resulting gap has widened further in recent months.
“Our trade deficit with China now reaches almost one billion euros a day. Since the beginning of this year, it has grown by another 10 percent. And this year, for the first time, all member states are in deficit,” she said.
The fact that every EU country now finds itself in the red marks a significant shift, erasing the traditional divide between export-oriented and more protectionist economies within the bloc.
Industrial Exposure and Raw Material Dependency
The impact of Chinese competition is no longer limited to low-cost consumer goods. The European Commission estimates that more than half of European industrial production is now exposed to competition from Chinese manufacturers.
At the same time, the EU remains heavily reliant on Chinese supplies of critical raw materials and components essential for key industries, including the green transition and defence manufacturing.
“Our dependency exceeds 80 percent for many critical raw materials and 90 percent for some rare earth metals. We have seen that this dependency can be used as a means of pressure,” von der Leyen warned.
Pressure grows for protective measures
Calls for a more defensive trade policy are intensifying, particularly within Germany’s industrial sector. The German Machinery and Equipment Manufacturers Association (VDMA) has urged the government to introduce compensatory duties on Chinese industrial companies.
VDMA President Bertram Kawlath argued that German industry needs protection from unfair competition, stating that evidence of market-distorting practices by China has now been thoroughly documented.
“It is unacceptable to become pawns in a game of subsidies, dumping, and currency manipulation,” Kawlath said, adding that the time has come for tariffs on products such as Chinese construction machinery.
