Market evolution: Electrical machinery and equipment (CN 85) — 2015–2025

Introduction

This report examines the evolution of EU external trade in Combined Nomenclature heading 85 — "Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles" — over the period 2015 to 2025. This is one of the EU's largest and most strategically significant trade categories, encompassing everything from semiconductor devices and lithium-ion batteries to cables, motors, and domestic appliances.

The data reveal a dramatic structural shift over the decade: while EU exports grew at a healthy pace, imports surged far more rapidly, transforming the EU from a near-balanced trader into a structurally deficit market. This widening trade gap is driven by explosive growth in a few product segments — most notably electric accumulators (batteries) and semiconductor devices — sourced predominantly from China, Vietnam, and other Asian economies. The analysis that follows unpacks these dynamics across three main dimensions: overall trade performance, product-level restructuring, and the growing vulnerability of the EU's position in global electrical machinery supply chains.

The widening trade deficit: EU imports outpace exports across the decade

EU exports grew strongly in value but stagnated in volume

EU exports of CN 85 products to non-EU countries rose from €165.6 billion in 2015 to €234.9 billion in 2025, a nominal increase of 41.8%. This growth was entirely price-driven: export volumes actually declined by 10.1%, falling from 7.09 million tonnes to 6.38 million tonnes, while the average export price rose by 57.7% to reach €36,834 per tonne in 2025. This pattern suggests that the EU has been moving up the value chain — exporting fewer physical units but at higher unit values — consistent with a shift toward higher-value-added products and components.

Import growth was far more dramatic, both in value and volume

EU imports tell a starkly different story. Total import value rose from €200.0 billion to €349.2 billion (+74.6%), while import volumes nearly doubled, surging from 8.39 million tonnes to 16.22 million tonnes (+93.3%). Unlike exports, the import price actually declined slightly (-9.7%), indicating that the EU was able to source larger quantities at lower unit costs — a hallmark of rapid scale-up by major exporting nations, particularly in Asia.

The trade deficit tripled, reaching €114 billion by 2025

The combined effect of these diverging trends was a dramatic widening of the EU's trade deficit in CN 85, which expanded from -€34.3 billion in 2015 to -€114.4 billion in 2025 — a deterioration of 233.3%. Net import reliance (the share of domestic consumption met by imports) climbed from a negligible 0.6% in 2015 to 14.8% in 2025, marking a structural shift in the EU's trade position. Notably, the deficit peaked at -€152.4 billion in 2023 before narrowing slightly, suggesting that some rebalancing may have begun.

China and Vietnam were the main drivers of import growth

The geographic concentration of import growth is striking. China remained the dominant supplier throughout the period, with imports rising from €86.2 billion to €165.5 billion (+91.9%), peaking at €194.3 billion in 2023 before declining. Vietnam saw the most dramatic proportional surge: imports grew by 162.5% to reach €23.9 billion, making it the EU's third-largest extra-EU supplier by 2025. India experienced the largest proportional increase of any major partner, with imports soaring by 598.5% from €1.4 billion to €10.1 billion. Meanwhile, imports from the United Kingdom fell by 45.3% — a decline almost certainly linked to Brexit — while imports from Türkiye (+104.8%) and Korea (+34.0%) also grew substantially.

EU export destinations shifted, with the US rising and Russia collapsing

On the export side, the United States became the EU's most valuable single destination, with exports nearly doubling from €21.7 billion to €40.9 billion (+88.9%). This contrasts with a modest decline in exports to the UK (-9.4%), likely reflecting post-Brexit trade frictions. The most dramatic shift was the near-total collapse of EU exports to Russia, which fell by 94.9% from €6.7 billion to just €342 million — a direct consequence of EU sanctions imposed following Russia's invasion of Ukraine. Switzerland (+39.2%) and Türkiye (+47.4%) also saw solid growth as export markets.

EU trade is increasingly concentrated on the import side

The Herfindahl-Hirschman Index (HHI) for imports by value rose from 2,101 to 2,442, indicating a moderate increase in supplier concentration. By volume, concentration increased even more sharply, from 3,131 to 5,347, reflecting the growing dominance of a smaller number of large-volume suppliers. Export concentration, by contrast, remained remarkably stable (HHI of 732–733), reflecting the EU's highly diversified customer base.

Batteries, semiconductors, and cables: the product segments reshaping the deficit

Electric accumulators (8507) were the fastest-growing import category

The single most transformative product segment was electric accumulators (CN 8507), which encompasses lithium-ion and other battery technologies. Import volumes in this category surged from 587,695 tonnes to 2,319,616 tonnes (+294.7%), while import value rocketed from €4.1 billion to €31.8 billion — an extraordinary increase of 682.7%. The import price per tonne rose from €6,914 in 2015 to a peak of €19,895 in 2023 before moderating to €13,712 in 2025, likely reflecting both supply expansion and price correction. This segment alone accounts for a large share of the overall trade deficit expansion and is closely linked to the EU's accelerating electric vehicle (EV) transition.

Semiconductor device imports (8541) underwent explosive volume growth

Semiconductor devices (CN 8541 — diodes, transistors, LEDs, photovoltaic cells, etc.) saw import volumes increase from 395,797 tonnes to 4,504,092 tonnes — a staggering rise of over 1,000%. However, the import price per tonne collapsed from €20,151 to just €3,265 (-83.8%), indicating massive commoditization and scale effects — particularly in photovoltaic modules and LED components. The import value peaked at €31.4 billion in 2022 before falling back to €14.7 billion in 2025, suggesting oversupply and price deflation in solar panels and related components.

Insulated cables and wire (8544) remained the largest export segment

Insulated wire and cable (CN 8544) was consistently the EU's top export product within CN 85, with export value rising from €9.7 billion to €14.3 billion (+47.1%). It was also the largest import segment by volume in several years. Export volumes remained relatively stable around 900,000–950,000 tonnes, while export prices increased from €10,239 to €15,832 per tonne (+54.6%), reflecting higher-value cable products and possibly the shift toward optical fibre and advanced conductor technologies.

Electrical transformers (8504) showed volatile but strong price increases

Electrical transformers and static converters (CN 8504) displayed notable price volatility. Export prices surged from €16,718 to €30,831 per tonne (+84.4%), while import prices followed a similar trajectory. Import volumes fluctuated significantly — peaking at 2.87 million tonnes in 2016 before stabilizing around 1.0 million tonnes — suggesting episodic demand for large power transformers tied to infrastructure cycles. The value of imports in this category more than doubled, from €8.4 billion to €21.2 billion.

Export segments showed divergent trajectories

Several smaller but noteworthy export segments displayed contrasting trends. Electric generating sets (CN 8502) saw export values rise from €6.1 billion to €7.6 billion (+24.7%) despite volume declines, indicating higher-value exports. Electric motors (CN 8501) maintained relatively stable volumes around 430,000–510,000 tonnes while export prices climbed from €11,751 to €21,967 per tonne. Conversely, carbon electrodes and brushes (CN 8545) — linked to steelmaking and industrial applications — saw export values peak at €1.7 billion in 2018–2019 before declining to €751 million by 2025, reflecting structural shifts in industrial demand.

Rising vulnerability: supply chain concentration and geopolitical exposure

Net import reliance shifted from near-balance to a 15% deficit

The EU's net import reliance in CN 85 moved from a barely positive 0.6% in 2015 to 14.8% in 2025 — a 2,253% increase in proportional terms. In 2023, the EU actually briefly registered a small negative net reliance (-4.7%), but this proved temporary, and the 2024–2025 figures returned to deficit. This trajectory means that for every €100 of CN 85 products consumed domestically, nearly €15 more is imported than exported — a structural dependency that was essentially absent a decade ago.

Trade intensity and export propensity both rose sharply

Two complementary indicators confirm the deepening integration of the EU into global CN 85 supply chains. Trade intensity — the ratio of total external trade (imports plus exports) to domestic production — rose from 45.5% to 72.7% (+59.9%). Meanwhile, export propensity — the share of EU production that is exported — climbed from 29.2% to 53.4% (+82.8%). This means the EU's electrical machinery sector has become significantly more export-oriented, but also more dependent on imported inputs and competing with low-cost imports domestically.

Import supply chains are increasingly concentrated in a few Asian economies

The rising HHI on the import side (from 2,101 to 2,442 by value, and from 3,131 to 5,347 by volume) signals growing supplier concentration. China alone accounts for nearly half of all CN 85 imports by value, and when Vietnam and India are added, these three countries represent the vast majority of import growth. This concentration creates vulnerability to supply disruptions, geopolitical tensions, and policy shifts such as tariffs or export controls.

Price shocks were detected in 2022, linked to energy and geopolitical crises

The volatility analysis reveals three significant supply shocks, all centered on 2022 — the year of the Russian invasion of Ukraine and the resulting energy crisis. The most severe was a price shock in EU imports from the United States (abnormality score of 55.7, with a 285.6% price shift), likely reflecting surging energy-related equipment costs. A substantial export price shock to Norway (97.4% price increase, abnormality 24.0) and an import price shock from Vietnam (28.0% price shift, abnormality 12.5) were also detected. Korea exhibited the highest overall import volatility (CV = 1.30), while Japan (CV = 0.086) and Switzerland (CV = 0.074) were the most stable trade partners.

Intra-EU specialisation is uneven, with Central Europe leading

Within the EU, the most specialised producers of CN 85 products (measured by revealed symmetric comparative advantage) are Malta (RSCA = 0.49), Hungary (0.42), Romania (0.31), Czechia (0.28), and Slovakia (0.22) — all Central and Eastern European members with strong manufacturing bases in automotive electronics, battery assembly, and electrical components. By contrast, Belgium, Ireland, Spain, and Greece show negative RSCA values, indicating they are net importers relative to the EU average. Germany dominates both EU exports (€80.3 billion in 2025, +39.9%) and imports (€79.8 billion, +56.1%), reflecting its role as both a major manufacturer and a massive consumer of electrical machinery — particularly for its automotive and industrial sectors.

Conclusion

The EU's trade in electrical machinery and equipment (CN 85) underwent a profound structural transformation between 2015 and 2025. What was once a relatively balanced trade position deteriorated into a deficit exceeding €110 billion, driven by the explosive growth of imports in batteries and semiconductor devices from China, Vietnam, and other Asian economies. While EU exports also grew — notably to the United States, and in higher-value product segments — they could not keep pace with the import surge.

This shift reflects both opportunity and risk. On the opportunity side, the EU has maintained strong export competitiveness in cables, transformers, motors, and generating sets, and has successfully moved toward higher unit values. EU production value in CN 85 grew by 180.6% over the period, and export propensity rose sharply, suggesting a vibrant export-oriented industrial base.

On the risk side, the EU's growing dependence on a concentrated set of Asian suppliers — particularly for batteries essential to the energy transition and semiconductors critical to digital infrastructure — represents a significant strategic vulnerability. The 2022 energy and geopolitical shocks demonstrated how quickly trade costs can spike, and the collapse of exports to Russia following sanctions illustrated the fragility of market access. As the EU pursues its Green Deal and digital sovereignty ambitions, the data underscore the urgency of diversifying supply chains, scaling up domestic production capacity in critical segments, and ensuring that the transition to cleaner technologies does not create new and potentially more dangerous dependencies.