EU Considers Import Quotas as China Trade Deficit Hits €36.5bn

The European Union is weighing the implementation of import quotas on chemicals and hybrid vehicles after its trade deficit with China reached €36.5bn in July 2026. Data from the Mercator Institute for China Studies indicates the EU now imports €3.10 of goods for every €1 exported to China, averaging a daily deficit of more than €1bn. Hybrid vehicle sales specifically grew tenfold between October 2024 and July 2026.

EU Trade Commissioner Maroš Šefčovič will travel to Beijing on October 8 to meet his Chinese counterpart to discuss ways to avert a trade war. This diplomatic effort follows statements from European Commission President Ursula von der Leyen that the trade imbalance must be arrested. The Government of China has warned it is prepared for a trade war, though its commerce ministry maintains a diplomatic posture.

Parallel trade tensions are being addressed in the United States. President Donald Trump is scheduled to meet President Xi Jinping in Washington this Thursday. Their summit is expected to focus on Chinese exports and the potential extension of a suspension on rare earth export restrictions.