The Euro area's (EA) trade performance in July 2025 reflects both short-term adjustments and longer-term shifts. On a monthly basis, exports fell slightly by 0.1 percent, while imports dropped more sharply by 0.8 percent, lifting the seasonally adjusted surplus to €5.3 billion, up from €3.7 billion in June. The improvement was primarily driven by more substantial surpluses in machinery and vehicles (€18.5 bn) and chemicals (€17.4 bn). However, year-over-year figures tell a different story. The trade balance narrowed by €6.1 billion, with chemical products seeing a notable decline from €23.8 billion in July 2024 to €17.4 billion in July 2025.

From May to July, exports to non-EA countries contracted significantly (minus 6.5 percent), while intra-EA trade edged up by 0.5 percent, suggesting growing reliance on internal markets amid external demand weakness. For the broader January to July 2025 period, the euro area still maintained a sizeable surplus of €106.9 bn, though lower than the €120.4 bn recorded in the same period of 2024. Import growth outpaced exports (4.7 percent vs 3.5 percent), signalling pressure on competitiveness. Overall, the data highlight a short-term surplus boost but underscore structural challenges, particularly in external demand and sectoral shifts in the chemicals sector.

The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade. For the Eurozone, monthly data are available for trade in goods; statistics on services are released as part of the overall quarterly current account report. The headline trade data are not adjusted for seasonal factors and so should only be viewed in relation to the outturn a year ago. However, seasonally adjusted figures available elsewhere in the report do allow for monthly comparisons.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the local currency dollar in the foreign exchange market.

Imports indicate demand for foreign goods and services. Exports show the demand for Eurozone goods in countries overseas. The euro can be particularly sensitive to changes in the balance since a trade deficit/surplus can create greater/reduced demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of EMU trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.