China’s Export Surge: How can Europe Address Rising Competition from China?

The EU’s goods trade deficit with China has more than doubled since 2019 – reaching around 1 billion Euro a day in 2025 – as China’s exports to the EU increased substantially while EU exports to China remained broadly stagnant. In her State of the Union address in September 2026, European Commission President Ursula von der Leyen warned that the “second China shock” is already here and is leading to deindustrialization in Europe’s industrial heartlands. Against this backdrop, EU Trade Commissioner Maroš Šefčovič has called for EU trade defense instruments to be deployed more easily and quickly if negotiations with China fail to produce tangible progress in rebalancing bilateral trade. Chinese manufacturers, however, are increasingly competing with European firms not only in the European market but also in China and in third markets.

How much of Europe’s competitiveness challenge is driven by growing Chinese competition? Can tariffs and other trade defense instruments effectively address competitive pressure from China in the European market, including price advantages arising from subsidies and an allegedly undervalued RMB? And how can Europe respond to Chinese competition in China itself and in third markets, where such instruments have limited reach? More generally, which domestic barriers to competitiveness should Europe tackle most urgently, and how?

Julian Hinz 

Julian Hinz is a Professor of International Economics at Bielefeld University and the head of the Research Center Trade Policy at the Kiel Institute for the World Economy. Previously, he was an assistant professor at Bielefeld University, head of the Kiel Institute’s Trade Policy Task Force, a visiting assistant professor at the Düsseldorf Institute for Competition Economics (DICE) of the University of Düsseldorf, and a Postdoctoral Research Fellow at the Kiel Institute. In 2018–2019, he was a Max Weber Fellow at the European University Institute in Florence. He holds a Ph.D. in Economics from the Paris School of Economics and Université Paris 1 Panthéon-Sorbonne. He is an associate editor for the Review of World Economics. His work is at the intersection of international economics and data science, focusing on international trade and its connection with foreign policy, the spatial dimension of international trade, migration and finance, and related questions in applied econometrics.  

Jürgen Matthes

Jürgen Matthes is head of the Research Unit International Economic Order and Business Cycle of the German Economic Institute, Cologne. He studied economics at the Technical University of Dortmund and Dublin City University. His research focuses on the economic aspects of globalization.