The EU’s trade deficit with China reached €359.9 billion in 2025, climbing 2.7% from the prior year. China then followed that up by posting its largest-ever trade surplus with the EU in the first quarter of 2026, powered by accelerating export growth and declining European imports into China.
Chinese exports to the EU have been growing at roughly 6% per year since 2021. During that same period, EU exports heading the other direction have actually shrunk, declining about 2.5% annually.
The EU now absorbs 31% of China’s total goods-trade surplus, making Europe the single most important outlet for Chinese manufacturing overcapacity.
Lithium-ion batteries and hybrid electric vehicles alone account for about 32% of the year-on-year increase in Chinese exports to the EU in 2025.
Higher US tariffs on Chinese goods have effectively redirected a portion of China’s export machine toward the European market. The chemicals sector has also emerged as a point of tension alongside EVs and batteries.
Research from Bruegel, the Brussels-based economic think tank, has highlighted the structural nature of this shift. Their analysis underscores that China’s share of EU goods imports has been climbing steadily, and the composition of those imports has moved up the value chain into precisely the industries Europe considers strategically important.
The EU’s trade policy toolkit has expanded considerably in recent years. Brussels has already imposed tariffs on Chinese electric vehicles, and the broader direction of travel points toward more sector-specific measures targeting batteries, chemicals, and other categories where subsidized Chinese exports are gaining market share.
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