Market evolution: Electrical parts (CN 8538) — 2015–2025

Introduction

This report examines the trade dynamics of CN 8538 — "Parts suitable for use solely or principally with the apparatus of heading 8535, 8536 or 8537, n.e.s." — covering EU trade with non-EU countries over the period 2015–2025. This product category encompasses parts for switchgear, circuit breakers, relays, fuses, plugs, sockets, and electrical control/distribution equipment, and is bundled under two sub-headings: 853810 (boards, panels, consoles, desks, cabinets and other bases for goods of heading 8537, not equipped with their apparatus) and 853890 (other parts for apparatus of headings 8535–8537). The analysis draws on trade overview data, partner-level breakdowns, concentration metrics, and volatility indicators.

Over the decade, the EU maintained a robust and growing trade surplus in this product category. However, the nature of that surplus changed fundamentally: while export value grew by 40.3%, this was almost entirely driven by rising unit prices rather than volume expansion. Meanwhile, imports nearly doubled in value (+85.1%) and surged in volume (+62.0%), reflecting the EU's deepening integration into global supply chains for electrical components. The result is a market that remains outward-oriented but increasingly reliant on external sourcing — a structural shift with important implications for European industrial competitiveness and supply-chain resilience.

1. From volume growth to price-driven expansion: the changing anatomy of EU trade

1.1 Exports grew in value but barely in volume, revealing a pronounced pricing shift

Between 2015 and 2025, EU exports of CN 8538 rose from €4.94 billion to €6.94 billion, a gain of 40.3%. Yet the underlying trade volume tells a very different story: export quantities edged up only 1.1%, from 172,364 tonnes to 174,297 tonnes. The entire growth in export value was therefore absorbed by unit prices, which climbed 38.8% over the period — from €28,669 per tonne to €39,788 per tonne. This pattern points to a shift toward higher-value-added product mixes in EU exports rather than a simple expansion of physical output.

The product segment breakdown confirms this interpretation. The dominant sub-category 853890 (other parts for switchgear and control apparatus) saw its export price rise from €39,598/t in 2015 to €52,457/t in 2025 (+32.5%), while volumes fluctuated within a narrow band (101,628 t to 113,543 t). Similarly, sub-category 853810 (boards, panels, and cabinets) experienced a 60.5% increase in export unit price (from €10,022/t to €16,090/t) alongside a slight decline in volumes from 63,712 t to 60,754 t.

1.2 Import growth was both volume- and price-driven, signalling structural demand expansion

In contrast to exports, EU imports of CN 8538 experienced a genuine volume expansion. Import quantities grew from 82,478 tonnes to 133,601 tonnes (+62.0%), while import values nearly doubled from €1.89 billion to €3.50 billion (+85.1%). The average import price rose more modestly, from €22,955/t to €26,231/t (+14.3%).

The composition of imports reveals the main driver: sub-heading 853890 (other parts) saw its import volume jump from 53,858 t to 93,353 t (+73.3%), while 853810 (boards/panels/cabinets) grew from 28,620 t to 40,248 t (+40.6%). Notably, the import price for 853890 dropped sharply during the COVID-19 period (from €33,829/t in 2017 to just €18,595/t in 2020), before partially recovering to €33,538/t by 2025 — suggesting that lower-cost suppliers gained market share during the pandemic recovery.

1.3 The EU trade surplus narrowed in relative terms but persisted in absolute value

Despite faster import growth, the EU remained a net exporter throughout the period. The trade surplus in value terms ranged from €2.72 billion (its trough) to €3.77 billion (its peak), ending at €3.43 billion in 2025 — a 12.5% increase from 2015. However, the net import reliance ratio, which captures the share of imports relative to domestic demand, moved from -27.5% to -21.8%, indicating a gradual erosion of the EU's self-sufficiency in this category. The deficit in net import reliance was at its most pronounced (i.e., the EU was most self-sufficient) in 2019–2020, when it reached -37.8%, but subsequently reversed as imports surged in 2021–2025.

2. Geographic realignment: new partners rise as Russia vanishes and China consolidates

2.1 China became the EU's dominant import source, more than doubling its share

China's exports to the EU in CN 8538 grew from €436 million in 2015 to €1.10 billion in 2025, an increase of 152.6% — far outpacing the overall import growth rate. By 2025, China alone accounted for roughly one-third of all EU imports in this category. This reflects the broader trend of Chinese dominance in mid-tier electrical component manufacturing, where cost competitiveness and scale advantages are decisive. China was also a major EU export destination (€866 million in 2025), making the EU–China trade flow in this segment close to balanced, though the trend is toward a growing Chinese surplus.

2.2 The United Kingdom's trade flows were reshaped by Brexit

The UK presents one of the most striking dynamics in the dataset. On the export side, UK-bound EU exports surged from €301 million in 2015 to €938 million in 2025 (+211.1%), making the UK the EU's single largest export destination by value. This likely reflects post-Brexit customs procedures and supply-chain restructuring that compelled UK importers to source finished sub-assemblies from the EU rather than relying on previously frictionless intra-EU component flows.

On the import side, however, UK-to-EU flows declined from €170 million to €134 million (-21.3%). The volatility coefficient for UK imports was exceptionally high at 1.17 — by far the most volatile of any major partner — indicating extreme year-to-year fluctuations consistent with transitional disruptions. The net effect was a dramatic swing in the EU's bilateral balance with the UK, from a modest surplus in 2015 to a much larger one by 2025.

2.3 Russia was eliminated from the EU's export map after 2022

EU exports to Russia in CN 8538 collapsed from €185 million in 2015 (and a peak of €192 million) to just €9,008 in 2025, representing a near-total wipeout. This is a direct consequence of the EU sanctions regime imposed following Russia's invasion of Ukraine in February 2022. Russia's volatility coefficient of 0.66 on the export side reflects the sharpness of this disruption. The loss of this market, while not catastrophic in the context of total EU exports (which still grew overall), represents a permanent structural change in the EU's export geography.

2.4 Emerging North African and Western Balkan partners gained ground

Several emerging partner countries experienced rapid import growth into the EU, reflecting nearshoring and supply-chain diversification trends:

• Tunisia saw imports to the EU grow from €62 million to €191 million (+206.9%), while EU exports to Tunisia also rose from €165 million to €304 million (+84.2%). Tunisia's position as a key node in the EU's electrical components value chain — anchored by its proximity and preferential trade agreements — appears to be strengthening.
• Morocco similarly grew as an EU export destination from €220 million to €443 million (+101.4%), consistent with the country's role in the automotive and industrial equipment sectors that rely heavily on these parts.
• Bosnia and Herzegovina was the fastest-growing import source by percentage (+743.7%, from €5 million to €43 million), albeit from a low base, suggesting early-stage integration into European supply networks.
• India grew from €90 million to €265 million (+194.8%) as an import source, reflecting its emergence as an alternative to Chinese supply.

2.5 EU import concentration increased, while export markets remained more diversified

The Herfindahl-Hirschman Index (HHI) for import partners rose from 1,129 to 1,380 by value (+22.2%) and from 1,608 to 2,332 by volume (+45.0%). A higher HHI indicates greater concentration — in this case, meaning that a smaller number of suppliers (principally China) accounts for a growing share of EU imports. By contrast, the export HHI remained lower and grew more modestly (from 686 to 776 by value, +13.1%), reflecting a more diversified export base spread across the UK, the US, China, Switzerland, Morocco, and Tunisia.

This growing import concentration is a vulnerability signal: the EU's sourcing of these critical electrical components is becoming more dependent on fewer, geographically distant suppliers — a concern in the context of geopolitical tensions and supply-chain disruptions.

3. Domestic production: rising values, declining volumes, and a shift in EU internal specialisation

3.1 EU production value more than doubled while volumes declined

According to the production data, EU domestic production of CN 8538 increased in value from €7.70 billion in 2015 to €18.05 billion in 2025 (+134.5%), while production volume in number of items actually fell from 150.4 million to 140.4 million (-6.7%). This implies a near-tripling of the average unit value of domestically produced items — consistent with a shift toward more complex, higher-margin products (e.g., advanced control assemblies, smart switchgear components) and away from commoditised parts.

The relationship between declining production volumes and rising import volumes (which grew 62.0% by weight) suggests that the EU has increasingly offshored the production of lower-value, higher-weight components while retaining or expanding domestic output of premium, technology-intensive parts.

3.2 Central and Eastern European economies showed the strongest export specialisation

The specialisation analysis for 2025 reveals that several Central and Eastern European (CEE) economies have the highest Revealed Symmetric Comparative Advantage (RSCA) in CN 8538:

These countries — notably Bulgaria, Romania, Hungary, and Czechia — have become specialised production and export hubs for electrical components within the EU, likely reflecting their integration into German and broader European industrial value chains, competitive labour costs, and targeted FDI in the electrical equipment sector.

By contrast, large EU economies with broader export portfolios — such as Belgium (RSCA: -0.75), the Netherlands (-0.49), and Ireland (-0.85) — show negative specialisation, meaning they are relatively underrepresented in this specific product category relative to their overall export profiles.

3.3 Germany remained the EU's trade heavyweight but with diverging import and export trajectories

Germany dominated both EU imports (€794 million in 2025, +39.9%) and exports (€2.37 billion, +10.7%) of CN 8538, consistent with its position as Europe's largest industrial economy. However, the asymmetry in growth rates is telling: German imports grew nearly four times faster than exports, suggesting that even the EU's industrial core is increasingly reliant on external sourcing for these components.

Other major EU member-state importers showed even faster import growth: Poland (+290.9%), Spain (+254.4%), Italy (+147.3%), and the Netherlands (+107.7%) all saw their import volumes rise dramatically, reflecting the broader industrialisation and electrification of these economies.

On the export side, the standout performers were Italy (€413M → €918M, +122.4%), Czechia (€258M → €464M, +80.1%), and Belgium (€69M → €647M, +838.4%), the latter's dramatic increase potentially reflecting the role of Antwerp as a re-export hub.

Conclusion

The EU's trade in CN 8538 over 2015–2025 tells the story of a sector in transition. While the EU maintained a healthy trade surplus throughout, the underlying dynamics shifted markedly. Export growth became almost entirely price-driven, reflecting a move toward higher-value-added products as domestic production volumes stagnated even as their value surged. Imports, meanwhile, grew in both volume and value, driven by the industrialisation of EU member states, the offshoring of lower-tier components, and the consolidation of China as the dominant external supplier.

Geographically, the period was defined by a dramatic reshuffling: the near-total loss of the Russian market post-2022, a tripling of trade with the UK likely linked to Brexit-induced supply-chain reconfiguration, and the rapid rise of emerging partners in North Africa (Tunisia, Morocco), the Western Balkans (Bosnia and Herzegovina), and Asia (India). Import concentration increased, raising questions about supply-chain resilience, while export markets remained comparatively diversified.

The growing import reliance — captured by the net import reliance ratio moving from -27.5% to -21.8% — and the rising trade intensity (from 39.8% to 46.8%) signal that the EU's electrical components sector is becoming more deeply embedded in global trade networks. For policymakers, this represents both an opportunity — access to competitive inputs — and a risk: greater exposure to geopolitical disruptions, supply shocks, and dependence on a narrow set of suppliers.