A Himalaya is facing the duties of Customs of Europe and Donald Trump are just one of the summits. “The union actually leads a commercial war on two fronts,” observes that economist Sander Bordoir in X. China and its colossal industrial exports are the other jaw of a vice that closes. Germany, Europe’s engine, already feels its hug.
This threat could even strengthen, while Chinese exporters face high customs tasks in the United States (30% at this stage). To sell goods, they can resort to the European Union. “This reorientation could be significant,” according to a note published on July 31 by economists from the European Central Bank (ECB).
Up to + 10%
“The euro zone could see that its imports from China increase up to 10 % in 2026,” write these economists, retaining a “critical” scenario, marked by the aggravation of commercial tensions. In a more moderate scenario, these imports would increase from 7 to 9%.
According to chosen hypotheses, the euro zone could buy between 35 and 51 billion euros in additional Chinese products. This can further increase EU’s commercial deficit towards Beijing, which amounted to 304.5 billion euros last year (approximately 10% of what France produces in one year).
The ECB economists warn that the EU is more vulnerable than seven years ago, and the First Commercial War SinadoNeranidense, during the previous mandate of Donald Trump.
A possible effect on prices
In addition, the Chinese currency, Yuan, tends to depreciate compared to the euro (1 Yuan has a value of 12 cents).
The latter also adds that “Chinese authorities have promised objective support to help exporters” affected by customs tasks.
This influx of Chinese products could create “a surplus of goods supply” and, ultimately, a price drop in Europe. “We observe that additional Chinese exports could reduce the general inflation of the IPCH by approximately 0.15 percentage points in 2026, with lower persistent effects up to 2027,” write the authors of the note.
At first glance, a price drop seems to be good news. However, this deflationary pressure was linked to the influx of foreign products of low risk of fact to destroy jobs in the European soil.
China imports less and less
This threat is even more significant since, on the contrary, Beijing tends to limit its imports. The monthly exports of the EU to China decreased significantly between January 2023 (19.3 billion euros) and December 2024 (16.8 billion euros) according to Eurostat.
This trend refers to France and especially Germany, whose growth is in a mast.
According to this report, the German economy exported 14.2% less than the previous year. It is almost a quarter of less than three years.
This trend is particularly materialized in the car. In this area, Beijing is imported today for less than $ 30 billion a year (26 billion euros) from the EU, compared to almost 50 billion dollars (43 billion euros) still four years ago, according to data compiled by the American economist Brad Setser, of the Foreign Relations Council (CFR).
Clearly, the EU is increasingly owned by China and exports less and less.
“Second Chinese shock”
In a recent note, Brad Setser, former White House advisor on the international economy, believes that “the continuous development of the Chinese manufacturing sector erodes the main assets of European exports.”
The Middle Kingdom is no longer “the world factory” that feeds European homes with economic t -shirts and microwaves. The ten -year plan launched by Xi Jinping in 2015 transformed it into a great industrial power.
Therefore, Chinese manufacturers compete with Europeans in their historical field and now surpass them in many areas.
In this context, many economists predict a “second Chinese shock”, concentrated in the old continent, after the first in the 2000s. The latter, especially touched the United States, where it helped destroy hundreds of thousands of jobs in the industry and sowed the anger germs that participated in the leader of Donald Trump.
This theme was in the heart of the last summit between the EU and China at the end of July in Beijing.
Until now, the European response has been shy and the Member States have divided in terms of the remedies that will be provided, as evidenced by the long discussions that led to the taxes of customs tariffs in the electric cars produced in China.
“Neijuan”
In front, the Chinese economic model is structurally unbalanced and depends a lot on industrial exports. This trend has been strengthened since the beginning of the real estate crisis that affects the country and has penalized homes a lot.
To compensate for the weakening of domestic demand and achieve the economic development objectives established by the Chinese Communist Party (CPC), Chinese local authorities have greatly promoted industrial investments, as recently reported by Financial Times.
So much so that China today has colossal production capabilities.
In 5 years, the country could capture 40% of the wealth created by the manufacturing industry worldwide against 27% today, according to Yan Se, professor of economy at the University of Beijing, cited by the Financial Times. France represents less than 2%, the United States 15%.
This frantic race creates important disturbances in the Middle Empire, where manufacturers tend to compress their margins to survive fierce competition. The authorities promise to address this phenomenon, locally “Neijuan (invitation), but this implies reforms of magnitude. The European Union probably does not have the luxury of waiting for China to change.
Source: BFM TV
