PARIS, FRANCE – JUNE 24: Pedestrians use umbrellas to protect themselves from the sun as record temperatures continue in Paris on June 24, 2026 in Paris, France.
Li Yang | China News Service | Getty Images
Europe wants to reduce its record trade deficit with China in October, but the bloc’s worst heat is driving unprecedented demand for imports of air conditioners made in China, a telling story of how difficult it will be for Brussels to address the trade imbalance.
The European Union and China issued a rare joint statement on Monday aimed at balancing trade between the two economies and addressing market access issues.
Disputes over trade imbalances, export controls and intellectual property should bring “tangible results” in October, European trade chief Maros Sefcovic told reporters after meeting Chinese Commerce Minister Wang Wentao. The two sides agreed to establish a bilateral working group to monitor commercial flows, with “guarantees” from Beijing that existing controls on exports to the rare earth and permanent magnets will not disrupt EU chains.
“Not everything will be solved, not everything will be fixed, but we think that between now and October, our teams have enough time to bring tangible results,” said Sefcovic. Chinese exports to the EU “keep increasing, while our market share in China keeps decreasing,” he said, calling the trend “unsustainable.”
Beijing has made it clear that it will not hesitate to retaliate against any new trade measures designed to deal with overcrowding.
But the time is not right. The couple met in Brussels just as record heat is heating up Europeans who are rushing to buy air conditioners – mostly made in China. Europe has long resisted air conditioning as noise, an eyere on building facades and unnecessary, as the brutal summer heat has lasted a while. And it fears the widespread adoption of energy-hungry technologies is undermining the fight against climate change.
The bloc’s trade deficit with China grew by 15% to €360 billion ($410 billion) last year, with all 27 member states facing deficits, and widened to €98 billion in the first quarter, the highest since 2022. Electrical equipment and machinery are among the most imported goods.
“The sense of urgency is over [China’s] the threat to the European industry seems to have reached its peak,” said Gabriel Wildau, Teneo’s managing director, and the Chinese leadership has shown “little desire to put Europe on hold.”
“There is no sign of policy action strong enough to financially reduce the trade surplus with Europe,” notes Wildau.
It’s a huge market to fill
Air conditioners add to that imbalance this summer.
Midea Group it is reported that orders for its PortaSplit unit – a portable split system designed for the different building codes of Western Europe – have exceeded 200,000 this year as of Monday, double the pace of 2025.
A website created by German software developer Adrian Kübel for real-time inventory tracking Midea units across the country have gone viral on social media and show many air conditioners are out of stock.
Ownership of air-conditioning in Europe stands at about 20% of households, well below the penetration rate of nearly 90% in the US, according to the International Energy Agency, leaving Midea and Asian appliance manufacturers. Samsung again Mitsubishi Electric they all run to close.
None of Europe’s five best-selling air-conditioner brands are owned in the EU. Haier Group, Gree Electric Appliances Inc. of Zhuhai and Midea Group Co. – all Chinese – together hold about 32% of the European market by sales volume in 2025, according to Euromonitor International. Beko Corp of Turkey and Japan Company Daikin Industries Ltd. put together a high five.
Midea’s air-conditioning design reflects a type of engineering designed to cross Europe’s diverse and multi-layered regulatory and market barriers.
The PortaSplit outdoor unit attaches to the window bracket, does not require drilling, and is classified as furniture rather than as a fixture – bypassing the ban on facade repairs in cities like Paris. Its refrigeration costs are also up to 1.99 kilograms, just under the French limit of 2 kilograms.
The absence of a European name among the leading air conditioning equipment suppliers underlines the industrial gap that EU leaders are trying to address.
Part of the EU’s imports from China are technology products, from cars to high-end machinery, said Denis Depoux, global managing director at Roland Berger. “This is a reversal of the last decades and it is scary for European industries, and it could be a financial crisis for the Union,” said Depoux. He acknowledged the joint statement as a positive step forward, as it is “the first in several years.”
Brussels balancing act
The growing demand for cooling technology made in China also reflects the economic reality underlying analysts’ doubts that Beijing will concede much in trade talks, as Brussels struggles to increase its own exports.
“China hasn’t really committed to putting in the original [import] A measure or a method of actual implementation,” said Alicia García Herrero, an economist at the French investment bank Natixis, calling the progress “smoke” from China to prevent Europe from implementing more protectionist measures.
European leaders are measuring consumer demand for cheap Chinese home appliances, such as air conditioners, and are keeping their industrial inputs in strategic and employment categories.
The European Commission, which has long criticized subsidies used by Beijing to prop up its companies and accuses it of dumping cheap goods in the bloc, said after talks on Monday that “the status quo is not an option.” The bloc has recently turned up the heat on Chinese companies operating in Europe, including limiting financing for solar projects using components made in China and ending tax exemptions for low-cost solar panels used by companies such as Temu and Shein.
“Any measures will be directed at areas where Chinese competition risks causing significant damage in key industrial sectors, or where there is a significant risk of China’s possible armed dependence,” said Andrew Small, director of the European Council on External Relations, with a particular focus on rare earths, chemicals, vehicles and heavy machinery.
“There are no discussions about taxes that exist in all countries,” he added.
For business in Europe, trade negotiations have immediate consequences.
“Europe also needs a common understanding to avoid an increase in tit-for-tat responses,” said Depoux.
“‘Reconciliation is delayed’ is a concept to be played here” – which could end up seeing Chinese and European companies come together to compete globally rather than clash over market shares, he added.
