Research by the European Central Bank found that the rerouting of trade flows away from the US because of tariffs was "modest" and affected only a narrow range of goods. The main drivers of China's export expansion were weak domestic demand, government support, and a fall in export prices amid a weak yuan.
In 2025, China's total exports grew by 5.5%. Shipments to the US fell by 20%, while exports to the euro area increased by 8%. Growth was also recorded in Asia, Africa, and Latin America. The influx of cheap Chinese goods into Europe produced a "strong disinflationary effect" in the second half of 2025, ECB Governing Council member François Villeroy de Galhau noted. He warned that the trend could prevent inflation from reaching the 2% target.
The ECB also cautioned that the full picture of the trade war's consequences has not yet emerged due to delays in logistics and customs clearance.
