Record Imports from China: Is a Tsunami Threatening the EU Industry?

The growth of Chinese exports in recent years has changed the balance of global trade, and the consequences of these movements are increasingly felt in Europe. After U.S. President Donald Trump imposed high tariffs on Chinese products, a large portion of the surpluses from that market was redirected towards the European Union and Asian countries. This creates additional pressure on European manufacturers, especially those in price-sensitive industries, and raises the question of how to adapt to the increasingly fierce competition.

Data from the State Bureau of Statistics shows a significant increase in imports from China to Croatia. While in 2024 there was a recorded growth of 12.9 percent, in the first six months of 2025, this trend accelerated to 19.5 percent compared to the same period last year. This dynamic is a direct consequence of geopolitical changes.

Klemen Praprotnik, a retail consultant in the Adriatics region, witnesses this redirection of trade flows firsthand. His analysis of regional trends reveals the breadth of the problem facing Europe.

– If last year the surplus of Chinese production flooded Europe, this year, with the introduction of U.S. tariffs, a tsunami has arrived. Flows have been redirected in a matter of months: the U.S. has closed its doors, and exports have been redirected to the open markets of the EU and Asia – explains Praprotnik.

Europe Under Attack

According to data from the General Administration of Customs of China, compared to August of last year, the EU increased imports from China by 10.4 percent, ASEAN by as much as 22.5 percent, while the U.S. reduced imports by 33.1 percent. This redistribution is not a technical error, but a conscious strategy of redirection following U.S. countermeasures.

Thus, the EU and ASEAN have taken on the role of the main recipients of surplus Chinese capacities, which exerts additional pressure on prices and margins in the European industry. Competition in productivity and delivery speed is becoming increasingly fierce, and the key question is no longer whether the wave of Chinese goods continues, but how quickly the European industry can adapt to the new conditions.

The German automotive industry is particularly affected, which once represented a pillar of the European economy. Praprotnik highlighted alarming data regarding the decline in German competitiveness.

– This year, for the first time in a very long time, the share of the German automotive industry in the U.S., Europe, and China has fallen below 20 percent. Even without increased tensions, 14 percent fewer cars have been exported to China this year – he noted.

Despite the growing pressure, Praprotnik does not believe that the European Commission will introduce more decisive market protection measures, and the reason is quite pragmatic – the EU simply cannot afford to open a new trade front.

– I certainly think that given the current tariff dispute with the U.S., the EU cannot afford another dispute, namely with China. Germany, which has been under significant pressure in recent years, would certainly hesitate here due to its automotive industry – explains Praprotnik.

His assessment is that the EU as such will not increase or limit imports from China, but may eventually reduce existing quotas for certain products such as steel and iron. Europe, he adds, cannot afford to increase import tariffs on raw materials for production as this would further worsen the competitiveness of an economy already suffering from high energy costs. He sees the abolition of the special customs regime as a possible measure.

– I certainly think that the EU should abolish ‘de-minimis’ (currently, goods under 150 euros are exempt from customs duties or a flat rate of two euros is paid) and thus equalize the conditions for European and Chinese manufacturers and traders. Namely, more than four billion dollars worth of Chinese products now enter the EU duty-free – he emphasizes.

A Problem for Exporters

Unlike the industrially developed European countries, Croatia is not directly affected by the increased imports from China. The irony is that many products bearing Croatian brands are actually produced in Chinese factories.

– I believe that Croatia as such is not directly affected by the increased imports from China. Many domestic ‘Croatian’ brands (especially electronics) are produced in China – explains Praprotnik.

However, there is a longer-term danger. Domestic exporters supplying European markets could become collateral victims of a trade war in which they do not directly participate.

– Here I think that the bigger problem is for Croatian exporters in the EU, who are losing orders in the long term due to the weakening of European brands at the expense of Chinese ones – warns Praprotnik.

Slovenia, on the other hand, shows how quickly imports can grow. In the first six months of this year, imports from China increased by more than 36 percent compared to the same period last year.

– Slovenia is somewhat specific because, due to the Port of Koper and a very strong pharmaceutical center at Ljubljana Airport, it imports a large amount of raw materials for production in parts of all of Europe, especially Eastern Europe – he said.

In addition, structural changes are already being observed in Slovenia.

– The only major change we notice is with Slovenian companies owned by Chinese, which are increasingly importing their assortment and then partially assembling it in Slovenia. In Slovenia, both foundries and steelworks are under pressure due to cheaper Asian imports. But competition here is not exclusively from China – adds Praprotnik.

The Weakening of European Brands

The biggest challenge for European competitiveness lies not only in trade policies but also in the fundamental conditions of doing business. For example, energy costs have become the Achilles’ heel of European industry.

– First of all, Europe will have to find a way to reduce energy costs. Here we have significantly jumped ahead of the global average in recent years and currently have some of the highest electricity prices – emphasizes Praprotnik.

This structural problem, he adds, is more serious than the current trade tensions as it directly affects the competitiveness of European production. While politicians debate tariffs and quotas, European entrepreneurs are losing the battle against Asian competitors every day due to high electricity bills.

Despite everything, Praprotnik believes that Croatia and Slovenia will not directly feel the largest wave of Chinese imports, but will suffer indirectly through the weakening of European brands in Western European markets.

– I believe that Slovenia and Croatia will not directly feel the consequences of the significant increase in imports from China to the EU, but mainly as exporting countries to the markets of Western Europe, where they feel the greatest pressure due to increased Chinese imports – he concludes.