A study by the Bank of Spain finds that European imports from China grew by 4.5% in products affected by Trump's tariffs. The impact on prices was moderate, with drops of less than 2%.
A study by the Bank of Spain has detected signs of a possible diversion of Chinese products to Europe as a consequence of the tariffs imposed by the United States during the first trade war between Washington and Beijing, between 2018 and 2019. The work, authored by economists Irina Balteanu, Maximiliano Moreno, and Francesca Viani, analyses whether the products that China stopped selling to the United States ended up redirected to the European market, as published by infobae.com.
The results show that trade diversion did occur, but it was limited. On average, European imports from China grew by 4.5% in products affected by the US tariffs, with a moderate impact on prices, which fell by less than 2% on average.
The most intense effect was concentrated in two specific categories: sophisticated technological equipment, such as telecommunications devices or optical instruments, and basic industrial components, generic parts used as raw materials in factories of all kinds. In contrast, consumer products (clothing, appliances, or toys) were not diverted to Europe, despite accounting for almost half of the tariffs imposed by the United States. US purchases of these items fell by more than 35%, but that merchandise was sold in other markets or reached the United States through countries like Vietnam or Mexico, which acted as intermediaries.
The second finding of the study directly affects European consumers and small manufacturers. In the sectors where there was trade diversion, Chinese exporters significantly lowered prices to make inroads into the European market. This pressure was concentrated in the cheaper segments, precisely where companies have less margin to absorb a price war.
The study also found that when China already had a dominant position globally in a particular product, it needed to lower prices less to gain ground in Europe. The authors warn that a repetition of this pattern with tariffs as large as those applied in 2025, which exceeded 40% on Chinese products,
"could contribute to a second shock of China in Europe", although they clarify that the aggregate effect would be moderate.
To measure the effect accurately, the researchers chose to analyse the trade war of 2018-2019 instead of the more recent one. They explain that the current episode is too confusing: many Chinese companies advanced their shipments to the United States before the new tariffs came into effect, and in May 2025, Washington and Beijing reached an agreement that suddenly reduced much of the increases applied weeks earlier. Furthermore, the tariffs of 2025 were applied generally to almost all Chinese products, making it impossible to compare categories with different levels of taxation. The 2018 episode, on the other hand, allows for a more reliable analysis because the tariffs varied significantly by product.
The European Commission is already monitoring possible signs of diversion of Chinese goods to the community market. The study by the Bank of Spain is published in the context of a tariff escalation that began in 2025, when the United States raised tariffs on Chinese products again.
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