The European Central Bank published analysis in its Economic Bulletin on how the United States’ 2018 tariff and non-tariff measures on Chinese goods reshaped euro area trade patterns. It finds that the main spillover to the euro area was trade diversion of Chinese exports towards the euro area, while euro area exporters did not materially increase their market share in the United States. The box reports that the US measures lifted the effective tariff rate on Chinese imports by almost 18 percentage points and coincided with a marked fall in Chinese exports to the United States and a substantial drop in China’s share of US imports. Using six-digit product-level data, it highlights diversion for tariff-affected goods such as clothing, IT equipment, auto parts and furniture, with redirection to the euro area from 2019 and persistence after the pandemic period. A structural gravity model for 2012-2023 associates the increase in US restrictions, which roughly doubled in number over the period assessed, with around a 10% dampening of US imports from China and a statistically significant 2%-3% increase in euro area imports from China, while South and South-East Asian economies increased exports to the United States as supply chains were reconfigured.
European Central Bank 2025-05-02
European Central Bank research links 2018 US tariffs on China to higher euro area imports from China and no euro area gain in US market share
The European Central Bank's Economic Bulletin reveals that the US's 2018 tariff measures on Chinese goods diverted trade to the euro area without boosting euro area exporters' US market share. The tariffs increased Chinese import rates by 18 points, reducing US imports from China by 10% and increasing euro area imports by 2%-3%. South and South-East Asian economies increased exports to the US as supply chains adjusted.