Study shows trade deficit ran at more than €1bn a day in July, days before Xi Jinping’s summit with Donald Trump
Consumers and businesses in the EU are spending three times more on Chinese imports than their counterparts in China are buying from the bloc, a study has shown.
Customs data showed the gap between the EU’s imports from China and exports to China, the trade deficit, ran at more than €1bn (£860m) a day in July.
The new data comes just days after the EU commission president, Ursula von der Leyen, said the trade imbalance must be arrested, and before Xi Jinping’s summit with Donald Trump on Thursday in Washington.
The Mercator Institute for China Studies (Meric) said: “The problem is no longer simply that the EU is buying more Chinese goods. China is selling more to Europe while buying less from it.”
China and the EU are locked in talks about averting a trade war, and the EU’s trade commissioner Maroš Šefčovič will travel to Beijing to meet his Chinese counterpart on 8 October.
“With the bilateral deficit now exceeding €1bn a day, the widening imbalance will almost certainly be high on the agenda at the planned EU-China meeting in October,” Meric said.
Analysis of Chinese customs data by Meric showed the EU’s trade deficit hit €36.5bn in July alone, up from €32.2bn in July 2025. From January to July, the total deficit now stands at €234bn, about €21bn more than the first seven months of 2025.
“The imbalance has now moved beyond three to one. For every €1 of goods the EU exported to China in July, it imported €3.10. The deficit was equivalent to €1.18bn a day,” Meric said.
Sources in Brussels said one of the measures being considered is introducing quotas on hybrid vehicles and certain types of chemicals imported from China.
The Financial Times reported last week that the EU has asked China to voluntarily reduce exports of hybrids, as sales rocketed after the imposition of extra tariffs beyond the 10% levy applying to all third-country car imports.
The latest figures show imports of hybrid cars that do not have to be plugged in have grown tenfold, from just under 4,000 vehicles sold in October 2024, to 50,000 in July 2026.
China has repeatedly said it is ready for a trade war but its commerce ministry last week maintained diplomatic stance before the October summit.
“Any solution between China and the EU must ensure a balance of interests, comply with World Trade Organization rules and the respective domestic laws of every side, and fully take into account the interests of industries on both sides,” it said.
Chinese exports will be high on the agenda at Thursday’s summit in Washington, with expectations that a 12-month suspension of Beijing’s earth export restrictions will be extended.
Kurt Tong, the former US consul general to Hong Kong and managing director of the Asia Group strategic advisory firm, said if a reprieve was not announced this week it could be announced at Asia-Pacific Economic Corporation summit next month.
China introduced the earth export restrictions in April 2025, almost bringing the car industry in the EU, Mexico, US and the UK to a halt amid shortages of permanent magnets.
It suspended the ban last October when Trump met Xi in South Korea but did not offer any further concessions when the two presidents last met in May in Beijing.