EU seeks trade balance with China but heat wave drives air conditioner imports
9 reported
The European Union and China released a joint statement on Monday aimed at balancing trade and addressing market access issues, with a goal of delivering "tangible results" by October. However, a historic heat wave in Europe is driving unprecedented demand for Chinese-made air conditioners, illustrating the difficulty of narrowing the trade deficit. European trade chief Maros Sefcovic told reporters after meeting with China's Commerce Minister Wang Wentao that the two sides agreed to set up a bilateral working group to monitor trade flows. Beijing has made clear it would retaliate against any new trade curbs designed to tackle overcapacity. The bloc's goods deficit with China grew 15% to €360 billion last year, with all 27 member states experiencing a shortfall, and expanded to €98 billion in the first quarter. Analysts expressed skepticism that China has made real commitments in trade talks, with one noting "no sign of policy action forceful enough to materially reduce the trade surplus with Europe."
What’s reported
The EU and China released a joint statement on Monday aimed at balancing trade and addressing market access issues.
European trade chief Maros Sefcovic said the two sides must deliver "tangible results" by October.
A bilateral working group will be set up to monitor trade flows, with reassurance from Beijing that existing export controls on rare earths and permanent magnets will not disrupt EU supply chains.
The EU's goods deficit with China grew 15% to €360 billion ($410 billion) last year, with all 27 member states experiencing a shortfall.
The deficit expanded to €98 billion in the first quarter, the highest since 2022.
Midea Group reported orders for its PortaSplit unit topped 200,000 this year as of Monday, double 2025's pace.
Air-conditioning ownership in Europe stands at around 20% of households, compared to nearly 90% in the U.S., according to the International Energy Agency.
None of Europe's five best-selling air-conditioner brands is owned in the EU; Chinese companies Haier, Gree, and Midea together hold about 32% of the European market by retail volume in 2025.
The European Commission said after talks on Monday that "the status quo is not an option."
Key figures
Maros Sefcovic, European trade chief
Wang Wentao, China's Commerce Minister
Gabriel Wildau, managing director at consultancy Teneo
Adrian Kübel, German software developer
Denis Depoux, global managing director at Roland Berger
Alicia García Herrero, chief economist at French investment bank Natixis
Andrew Small, director at the European Council on Foreign Relations
Sources: CNBC
