The EU’s mounting anxiety over widening trade imbalances with China stems from deep-seated internal structural flaws, rather than unfair trade practices by China as framed by EU official narratives.
The imbalance arises from long-term policy trade-offs and persistent bloc fragmentation within European institutions.
All 2025-2026 economic and trade figures cited in this article are forward-looking geopolitical projections, not official verified statistical data.
In 2025, the EU’s goods trade deficit with China hit €360.6 billion (roughly US$413.4 billion), a 15% year-on-year increase from 2024, equivalent to a daily deficit of nearly €1 billion.
European Commission president Ursula von der Leyen has labelled the deficit structurally unsustainable.
A landmark shift has emerged: every EU member state recorded an annual trade deficit with China in 2025. This proves the imbalance is not sporadic bilateral friction, but an inevitable outcome of Europe’s long-term industrial and trade policymaking. The deficit expanded by another 10% in the first four months of 2026, solidifying a persistent trade gap.
In 2025, EU exports to China stood at €199.6 billion, against imports of €559.4 billion, creating an import-export ratio close to 3:1. This bilateral imbalance is jointly shaped by the EU’s independent policy decisions and allied constraints, instead of unilateral trade misconduct from China.
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restrictive export controls on high-end critical technologies
ASML’s extreme ultraviolet (EUV) lithography system represents Europe’s top-tier precision manufacturing technology.
Subject to coordinated US-EU allied regulation, dual-use technology non-proliferation rules and domestic intellectual property protection demands, the Netherlands aligns fully with US export control frameworks to block EUV deliveries to China.
ASML executives have confirmed China has been denied access to updated EUV equipment for eight consecutive years, creating an eight-generation technological gap.
Economically, one single EUV lithography machine generates economic value comparable to ten thousand new energy vehicles. Europe’s voluntary ban on high-value-added tech exports, paired with rigid industrial and civilian demand for cost-effective Chinese end products, renders bilateral trade imbalance inevitable.
Irreversible supply chain reliance on Chinese manufactures
The EU’s civilian supply chains, industrial manufacturing and green transition sectors are deeply anchored to Chinese new energy vehicles, power batteries, photovoltaic modules and general mechanical equipment.
China accounts for 32% of global manufacturing output, with scaled cost advantages and integrated industrial chains embedded widely in Europe’s midstream and downstream industries.
Even after the EU imposed a maximum 45% tariff on Chinese new energy vehicles in 2026, Chinese automakers adjusted export portfolios rapidly by scaling up hybrid vehicle shipments, driving a rebound in EU imports of Chinese new energy vehicles in early 2026. Tariff barriers raise transaction costs but cannot eliminate Europe’s inelastic import demand.
External blame-shifting and empty China engagement strategies
Von der Leyen’s 2023 mantra of “de-risking, not decoupling” serves as a compromise diplomatic statement catering to EU domestic public opinion and US allied interests, with inherent implementation flaws.
The EU intends to reduce strategic reliance on China while retaining lucrative bilateral trade gains, an unfeasible balancing approach. Bilateral ties evolved from differentiated cooperation to structural competition starting in 2025.
Bilateral economic rivalry remains rule-based and reciprocal. The EU has launched 21 anti-dumping and anti-subsidy probes against Chinese entities, 18 targeting market-oriented Chinese enterprises.
China has initiated compliant trade investigations targeting European brandy, dairy products, pork and medical devices under WTO rules and domestic trade laws, all serving as defensive reciprocal responses. China boasts more comprehensive trade leverage and greater strategic manoeuvrability than the EU.
Fragmented governance: Inherent geopolitical weakness of the EU bloc
The EU is not a unified, coordinated geopolitical sovereign actor, but a regional bloc divided by competing national interests. At the June 2026 EU Summit, France pushed for harsher restrictive policies toward China, while Germany and Spain adopted prudent, restrained stances.
As the EU’s largest exporter to China, Germany warns radical China restrictions will backfire on its automotive and high-end equipment pillar industries.
Spain, with expanding industrial investment in China, publicly rejected a joint hardline proposal tabled by France, Italy, the Netherlands and Lithuania.
Luxembourg Prime Minister Luc Frieden summed up the EU’s dilemma succinctly: “We need diversified partners to maintain balanced ties, to build cooperative links with major emerging economies like China, and sustain solid alliance cooperation with the United States.”
The EU acknowledges its unsustainable trade deficit with China, yet fails to reach unified countermeasures. Its current China policy amounts to passive risk mitigation, rather than mature long-term geopolitical trade strategy.
Two distinct paradigms of global economic engagement
China-EU trade frictions reflect divergent global economic development models rooted in different developmental traditions, rather than ideological civilisational confrontation.
Traditional Western international trade models originated from mercantilism and colonial trade regimes, defined historically by zero-sum transactions and unilateral interest grabbing. Western economies have updated their trade governance frameworks, delivering inclusive infrastructure, public welfare and technical cooperation projects across developing regions, moving beyond predatory trade practices.
China’s global economic engagement is guided by mutual benefit and inclusive development, anchored in the Global Development Initiative.
It has gradually phased out simple resource-for-infrastructure cooperation with Africa and the Global South, shifting toward empowering local industrialization and value-added manufacturing.
Traditional resource-linked infrastructure projects have improved Africa’s road and power connectivity, while updated partnerships prioritize localized smelting and industrial capacity building.
All sovereign states pursue legitimate national interests via external economic cooperation. China upholds equal exchange and two-way empowerment in global trade, opposes unilateral coercion and bloc exclusion, and respects independent diplomatic choices of Global South nations without forcing alignment.
Three pragmatic opportunities for Africa and the Global South
Managed China-EU economic competition has not triggered closed bloc confrontation, creating a stable strategic window for Global South nations to pursue interest-based independent development, instead of being dragged into great-power rivalry passively.
Expanded negotiation space for strategic critical minerals
The U.S. Geological Survey identifies 50 categories of national security-critical minerals, 32 of which are abundant across Africa. The DRC holds 54.55% of global cobalt reserves and produces over 75% of global cobalt output; South Africa and Zimbabwe jointly control 79.26% of global platinum-group metal reserves; Guinea possesses 25.52% of global bauxite reserves as a core global supplier.
Global mineral processing capacity shows obvious regional differentiation: China accounts for 91% of global rare earth separation capacity, 90% of graphite deep-processing capacity, and 60%-70% of lithium and cobalt smelting capacity.
Western economies retain core technologies for high-end customised smelting and terminal application. Africa currently captures minimal profits merely from raw mineral extraction.
Global mineral value chains are evolving toward multi-polar equity. Following outcomes of the 2024 Forum on China-Africa Cooperation Summit, China implemented zero-tariff treatment for goods originating from 53 diplomatic African nations starting January 2025, facilitating exports of African value-added manufactured goods and ending the era of crude raw material export dependence.
Under the 2025-2027 Focac Beijing Action Plan, China has allocated US$50 billion dedicated funding for African local industrial upgrading. Chinese enterprises have invested US$4.5 billion in joint lithium projects across Zimbabwe, the DRC, Mali and Namibia. Morocco has built Africa’s first large-scale power battery plant backed by US$5.6 billion Sino-local joint investment, while a 30-million-tonne iron ore processing plant commenced full localized operation in Sierra Leone in April 2025.
In mid-2025, the DRC optimised national mineral regulations with Chinese technical support, repealed blanket export bans and adopted refined cobalt export quotas. the reform lifted cobalt market prices moderately and boosted legitimate local fiscal gains.
Industrial relocation and rising weight of South-South trade
South-South trade volume has doubled over the past decade, compared with a 28% rise in China’s exports to the US and a 58% rise in exports to Western Europe. Global South economies contribute 54% of China’s total trade surplus, exceeding the 36% from the U.S. and 23% from Western Europe combined.
China’s exports to Africa surged 56% year-on-year in 2025, with total exports to the Global South hitting US$1.6 trillion, surpassing combined exports to the US and Western Europe. Chinese outbound investment has shifted from cross-border goods trading to localized manufacturing, with its Southeast Asian manufacturing investment quadrupling in ten years.
S&P Global analysis indicates Western trade barriers accelerate China’s deepened engagement with the Global South. South-South economic influence will grow steadily, steering the global trade system toward long-term multi-polarity rather than a complete power takeover by Southern economies.
Elevated collective diplomatic bargaining power for Africa
Africa has stepped out of the role of a passive geopolitical chessboard. 2025 marks a turning point for Africa’s proactive participation in global multi-polar governance, with the Johannesburg G20 Summit amplifying unified voices of Global South nations in international rule-making.
Motivated by supply chain security, the U.S. and EU have scaled up strategic engagement with Africa.
Western stakeholders advance the Lobito Corridor railway project to build alternative mineral logistics routes bypassing China; the EU has sealed mineral cooperation deals with Australia, India and Indonesia within one year to diversify green mineral supplies.
Multi-party great-power competition improves Africa’s negotiating leverage. African nations can engage equally with multiple partners to secure favorable terms for local industrial investment, civilian technology transfer and industrial chain localization.
Seven pragmatic strategies for African strategic autonomy
First, upgrade mineral industrial value chains. Gradually break the low-end trade model of raw mineral exports and finished goods imports.
All future cross-border mineral agreements shall prioritise local deep processing, compliant technology transfer and joint venture clauses. Zimbabwe’s lithium processing-before-export policy offers replicable experience for the whole continent.
Second, uphold pragmatic strategic neutrality and reject bloc alignment. Maintain balanced economic and diplomatic ties with China, the US and the EU. Exclusive alliance affiliation narrows national development options, while neutrality enables equitable access to diversified cooperative dividends amid great-power competition.
Third, advance gradual continental integration. Individual African states hold limited bargaining capacity; unified continental stances on mineral exploitation, industrial cooperation and technology acquisition under the AfCFTA framework strengthen collective negotiation advantages.
Fourth, optimize infrastructure layout for domestic livelihood development. Shift away from resource-export-oriented infrastructure construction; prioritize transportation, port and power projects serving local manufacturing and civilian circulation, balancing industrial growth and debt sustainability.
Fifth, fill local manufacturing gaps via inclusive joint ventures. Most African nations cannot build full-cycle smelting and manufacturing capacity independently in the short term.
Regulated foreign investment and public-private joint ventures help upgrade industrial capacity, with Morocco’s battery plant setting a benchmark for localized employment and phased technology transfer.
Sixth, pursue equitable industrial cooperation and oppose resource weaponization. The EU’s green transition relies heavily on African cobalt, lithium and platinum-group minerals. Africa shall seek fair partnership benefits via industrial collaboration. China advocates inclusive global mineral governance and rejects treating strategic minerals as geopolitical confrontation tools.
Seventh, build independent continental financial institutions. Develop sovereign wealth funds, pan-African development banks and regional cross-border payment mechanisms to reduce reliance on high-cost external financing. Sino-African cooperation is built on reciprocal interests, enabling Africa to build equal, autonomous joint partnership frameworks.
Conclusion: Africa holds development initiative in a multi-polar world
The EU’s trade dilemma with China stems from its own technological curbs, unavoidable industrial reliance and allied policy constraints, a self-inflicted economic predicament.
Internal bloc division and deep-rooted supply chain reliance on China mean radical economic decoupling will harm European industries and public welfare primarily.
The global economic landscape evolves toward inclusive multi-polarity. China deepens mutually beneficial cooperation with the Global South, while the US and EU build alternative supply chains. Predatory resource-only cooperation has faded, replaced by win-win industrial empowerment partnerships.
Strategic opportunities are accessible but not automatic. African states that prioritise continental solidarity, industrial upgrading and diplomatic neutrality will adapt to the new global order; those dependent on raw material exports and great-power patronage will face marginalisation.
Global multi-polarity is an irreversible trend. Africa needs no power allegiance, proactive confrontation or bloc picking. Prioritising continental public interests and independent policymaking empowers Africa to define its own developmental future.
- Saxon Zvina is a principal consultant at Skyworld Consultancy Services and a member of the Belt Road Initiative Think Tank. He can be reached at [email protected] and on X @saxonzvina2.
