Morning Market Tidbits: China–EU trade: imbalance over tariff effects

Research evidence excerpt

Morning Market Tidbits: China–EU trade: imbalance over tariff effects

Accessible version

Morning Market Tidbits

China–EU trade: imbalance over tariff

effects

Key takeaways 15 May 2026

Economics• 2025 tariffs cut China's exports to the US sharply, but there is no evidence of tariff-

United States

induced rerouting towards the EU.

• Strong EU imports from China pre-date tariffs. Structural drivers are at play, including Chiara Angeloni

Europe Economist

"vent-for-surplus" dynamics. BofA Europe (Milan)

+39 02 6553 0365

• Today's focus will be on April Industrial Production. chiara.angeloni@bofa.com

US Economics

BofAS

See Team Page for List of Analysts

What Matters Today: Tariffs reduced US imports from China but fail to explain any meaningful

rerouting of Chinese exports towards Europe

Post-April25 coefficient for reciprocal‑tariff sectors and Sec232-tariff interaction term (capturing how

Sec232‑tariffed sectors differ from reciprocal‑tariff sectors)

0.2

0.1

-0.1

-0.2

-0.3

US - Reciprocal US - Sec232 EU - Reciprocal tariffs EU - Sec232

tariffs***

Source: BofA Global Research. Note: dependent variable is yoy Chinese export growth to the US and to the EU. See more details here:

Euro Area Viewpoint: China-EU trade: the story is macro imbalance, not tariff diversion

BofA GLOBAL RESEARCH

Tariff-induced rerouting: a second-order story for the EU

US tariffs worked as intended against Chinese exports, which slowed by 20-26% since

April 2025. When controlling for tariff type, we find that reciprocal tariffs did have a

major impact on diverting Chinese exports away from the US. Yet we find no statistical

evidence that China’s export growth to the EU was due to tariff-induced trade rerouting.

‘Vent-for-surplus’ theory explains rising EU exposure