The euro area’s trade balance took a hit in January 2025, posting a mere €1.0 billion surplus—down from €10.6 billion a year prior—while the European Union swung into a €5.4 billion deficit, reversing a €6.7 billion surplus in January 2024. This shift highlights growing import pressures and shifting trade dynamics.
Exports from the euro area rose by 3.0% to €232.6 billion, but imports surged by 7.6% to €231.5 billion. The Extra-EU saw a similar trend, with exports increasing by 4.4% to €208.7 billion, yet imports jumped 10.9% to €214.1 billion. The machinery and vehicles sector—once a stronghold—saw its balance plummet from €16.5 billion in December 2024 to €7.4 billion in January 2025, driving the euro area’s trade surplus lower.
Structural weaknesses are emerging. The EU’s deficit with China widened to €30.1 billion, while trade imbalances with the U.S. and other partners reflect a shifting global landscape. With trade tensions still high, the EU must decide: to protect industries through strategic trade barriers or to push for freer trade to sustain long-term economic growth. The path chosen will shape Europe’s competitiveness in an increasingly fragmented global economy.
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