Euro-area evidence from the ECB shows that the 2018 U.S. Section 301 tariffs on Chinese goods redirected part of China’s exports towards Europe, consistent with trade diversion. The ECB quantifies non-trivial shifts in export destinations and discusses channels through which an influx of Chinese goods can affect euro-area prices and trade composition. ECB economists, using product-level data, document that the 2018 U.S. tariffs on Chinese goods reshaped flows, with Chinese exports re-routed toward alternative markets — including the euro area.
The diversion narrative has not faded: the ECB (and independent analysts) keep highlighting the risk/likelihood of extra Chinese supply reaching Europe; in parallel, the Commission has been active with trade-defence when specific surges threaten injury — e.g., definitive countervailing duties on Chinese EVs (from 31 Oct 2024) and new duties on Chinese construction machinery in April 2025.
In 2025 the European Central Bank explicitly warn that renewed U.S.–China frictions could redirect more Chinese supply to Europe, easing prices but squeezing some EU producers.
The European Commission has put in place a trade-diversion monitoring regime in 2025, explicitly to detect import surges into the EU driven by third-country tariff actions (like the U.S. measures). Trade and Economic Security
To test the Italian case rigorously, it is possible to use HS-6 monthly/trimestral microdata from Eurostat-Comext and a Difference-in-Differences design that compares Italian imports from China for products exposed to U.S. Section 301 lists vs non-exposed products, before/after 2018; restrict to goods that Italy plausibly produces by filtering HS-6 where Italy exports above a chosen threshold. Data and code-book access via Eurostat’s DS-059341.
Note: HS6 data mean import/export values and quantities reported for each 6-digit code, typically monthly or quarterly, and they let you compare products consistently across countries and time. HS6 data cover goods only (not services), depend on the HS revision in force (e.g., HS 2017 vs HS 2022, so concordances may be needed), and can reflect issues like re-exports, valuation differences (CIF vs FOB), or occasional misclassification. HS6 is the sweet spot for analysis: it is specific enough to identify product categories meaningfully, yet still comparable across jurisdictions.
1) What the best euro-area evidence already shows
ECB Economic Bulletin (Issue 3/2025) includes a focused analytical box on the implications of U.S.–China trade tensions for the euro area, documenting that U.S. tariffs reduced Chinese exports to the U.S. and raised Chinese exports to alternative markets, including the euro area. The box discusses magnitudes, sectoral patterns, and potential effects on euro-area prices. Use it as your baseline macro identification for trade diversion into Europe. European Central Bank
A companion ECB research summary reiterates the finding: a significant decline in Chinese exports to the U.S. after the tariffs, with diversion towards Europe. IDEAS/RePEc
For additional central-bank corroboration inside the Eurosystem, the Bank of Finland Bulletin (03/2025) reviews the macro channels through which the trade war propagates (tariffs, exchange rates, uncertainty), complementing the ECB narrative. Bank of Finland Bulletin
2) How to measure the Italian effect properly (replicable plan)
• Levels/deficit: Italy’s imports from China have been large and rising again into 2024–2025; the bilateral goods gap widened markedly (€34–35 bn in 2024 by Eurostat-based tallies; OEC shows further import growth into early 2025).
• Composition: EU data show China’s top shipments to Europe are heavy in electronics/ICT and machinery, alongside other manufactures such as textiles/clothing and furniture — exactly the families you flag for faster Italian inflows.
- Bilateral, product-level trade: Eurostat Comext DS-059341 (“International trade of EU and non-EU countries since 2002 by HS2-4-6”). Pull Italy’s imports from China at HS-6, monthly or quarterly, 2016–2025. European Commission
- Production filter: approximate “made in Italy” by keeping only HS-6 where Italy exports to the world above a threshold (e.g., €10m/year, with robustness at €5m/€20m) and with persistence (e.g., present in ?3 of the last 5 years). Same DS-059341. European Commission
- Treatment mapping (U.S. tariffs): build an HS-6 treatment dummy from USTR Section 301 lists (Lists 1–4; 2018–20; plus subsequent four-year reviews). Map U.S. HS to international HS-6 and merge. United States Trade Representative
See: Eurostat Comext entry point and dataset: Easy Comext portal and DS-059341 browser. European Commission
3) Institutional context and why the EU is watching this
- Commission monitoring for trade diversion (2025): The European Commission set up an import-surveillance task force using real-time customs data to spot surges “diverted” from markets that introduced tariffs. This is explicitly framed as a response to shocks like the U.S. measures. See the official page and FAQ.
- Legal backdrop at the WTO: The WTO panel in DS543 (2020) found the U.S. Section 301 tariffs inconsistentwith WTO obligations; the dispute remains unresolved systemically given the Appellate Body impasse. Use the WTO case page and the panel report for precise findings/conclusions.
- Eurostat context on EU–China trade: Statistics Explained gives curated, regularly updated syntheses (with direct links to Comext series) for EU–China trade dynamics over 2023–2024; useful for situating Italy within the EU picture.
WTO backdrop
• WTO: the DS543 panel found the U.S. Section 301 duties WTO-inconsistent (the Appellate Body’s paralysis has left them standing de facto). wto.org
The dispute. In “United States — Tariff Measures on Certain Goods from China” (DS543), China challenged the “Section 301” additional duties that the United States imposed on large sets of Chinese products beginning in 2018. The U.S. Trade Representative announced extra ad valorem duties—typically 25%—in successive tranches over 2018–2019 under Section 301 of the Trade Act of 1974. Federal Register notices document those actions and their scope, including the August 16, 2018 determination to impose a 25% duty on a broad list of tariff subheadings and the contemporaneous descriptions of “List 1/2/3/4” coverage and exclusions.
The panel’s findings. On 15 September 2020, the WTO panel circulated its report (WT/DS543/R) and found the U.S. measures inconsistent with core GATT obligations. The panel held that the additional duties applied only to imports from China breached the most-favoured-nation obligation (Article I:1 GATT) and that the extra tariffs exceeded the United States’ bound rates (Article II:1(a) and (b) GATT). The United States invoked the “public morals” exception (Article XX(a) GATT), arguing that the tariffs were “necessary” to protect against conduct like theft of intellectual property and forced technology transfer. The panel accepted in principle that protecting against such conduct can reflect a society’s public morals, but it concluded that the United States had not demonstrated necessity or a sufficient nexus between the stated objective and the wide product lists actually targeted; the Article XX(a) defence therefore failed.
The appeal that froze everything. On 26 October 2020, the United States filed a notice of appeal. Under DSU Article 16.4, a panel report cannot be adopted by the Dispute Settlement Body if a party appeals within 60 days of circulation. Because an appeal suspends adoption, the filing placed the case in “appellate” status.
The institutional limbo (“appeal into the void”). Since December 2019, the WTO Appellate Body has lacked the quorum of three members needed to hear appeals, owing to blocked appointments. With no functioning appellate instance, appeals cannot be heard or completed, which prevents adoption of the underlying panel reports and, in turn, stalls the usual path to compliance or authorized retaliation. This is the structural reason the DS543 panel findings have not taken legal effect through adoption, even though the reasoning is on the record.
The available workaround (not used here). A group of WTO members created the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) under DSU Article 25 to replicate appellate review by arbitration while the Appellate Body is down. Parties must both opt in to use it; the United States is not a participant, and DS543 has not been redirected into MPIA review.
The practical upshot. The panel said the Section 301 duties violate GATT Articles I and II and rejected the Article XX(a) justification; the United States appealed; the non-functioning Appellate Body means the appeal cannot be decided; the lack of adoption means no binding DSB recommendations or authorization for countermeasures under the ordinary track; the duties therefore remain in place de facto while the dispute sits in procedural suspension.
• EU monitoring & safeguards: the Commission now runs explicit trade-diversion monitoring and has long pointed to diversion risks when justifying safeguards (most clearly in steel after U.S. Section 232, cited here as the template).