Sep 16, 2026: European Commission President Ursula von der Leyen has delivered one of her clearest warnings yet over the European Union’s growing economic dependence on China, declaring that the bloc’s trade deficit with Beijing has reached a “tipping point” and warning that Europe is already experiencing a new wave of deindustrialisation.
“Our trade deficit with China is now €1 billion a day. It has reached a tipping point,” von der Leyen said in her 2026 State of the Union address to the European Parliament on September 16. She described the situation as “unsustainable” and said what some had called a potential “second China shock” was already happening.
The figure refers specifically to trade in goods. It does not mean that the EU literally sends €1 billion to China every day. According to Eurostat, the EU exported €199.6 billion in goods to China in 2025 while importing €559.4 billion, producing a goods trade deficit of €359.8 billion — equivalent to almost €1 billion per day.
The imbalance has also continued into 2026. Eurostat reported that the EU’s goods trade deficit with China reached €103 billion in the second quarter of 2026, the highest quarterly level since the third quarter of 2022.
From trade imbalance to industrial pressure
For Brussels, the concern goes beyond the size of the deficit.
Von der Leyen connected the imbalance directly to European industry, saying the effects are visible in communities and factories across the bloc and are contributing to deindustrialisation in Europe’s industrial heartlands.
The concern reflects a broader debate over China’s enormous manufacturing capacity and its growing exports of industrial and high-technology products. Electrical machinery and equipment alone accounted for €164.9 billion of EU imports from China in 2025, while machinery and mechanical appliances accounted for another €106.5 billion.
The European Commission has increasingly focused on what it describes as asymmetries in the EU-China economic relationship, including questions of reciprocity, market access and the effects of Chinese industrial policies on European producers.
Critical minerals add another layer of vulnerability
The trade imbalance is only part of the problem.
Europe is also heavily dependent on China for a range of critical raw materials, particularly rare earth elements that are important for modern manufacturing, electronics, electric vehicles and defence-related technologies.
Von der Leyen announced that the EU will establish a European Corporation on Critical Raw Materials to help secure supplies and build strategic reserves. The stated objective is to reduce Europe’s vulnerability to supply disruptions and excessive dependence on a single external supplier.
That issue has become particularly sensitive because access to critical minerals is increasingly connected to industrial and economic security. China’s position in global supply chains means that disruptions or restrictions affecting these materials can have consequences far beyond the mining sector.
Brussels gives Beijing another deadline
The European Commission is simultaneously trying to address the imbalance through negotiations with Beijing.
EU Trade Commissioner Maroš Šefčovič has been leading those discussions, with Brussels seeking tangible results by October. Šefčovič has previously argued that simply increasing European exports to China will not be enough to close the gap because the imbalance is too large.
Von der Leyen made clear that negotiations will not be the EU’s only response.
“If the dialogue does not produce concrete results,” her message was that Europe would use the tools available to it to rebalance the relationship.
That marks an important shift in the way Brussels is framing its China policy. The question is increasingly not simply how much Europe trades with China, but how dependent Europe becomes on China for the industrial capacity, technologies and raw materials it considers strategically important.
The EU remains deeply integrated with the Chinese economy, and trade between the two sides is enormous. But the direction of that relationship is becoming a growing economic-security concern in Brussels.
For Europe, the debate is therefore moving beyond whether Chinese imports are cheap or whether European companies can compete.
It is increasingly about whether an economy can remain strategically resilient when a major share of its industrial supply chains and critical materials depend on a single country.
And von der Leyen’s message on September 16 was unmistakable: Brussels no longer sees that vulnerability as a distant possibility. It sees it as a problem already unfolding.
