Do government subsidies drive global imbalances?
14 August 2026By Maria Grazia Attinasi, Lukas Boeckelmann, Isabella Moder, Til Pommer and Tajda SpitalWidening global imbalances draw attention to policies shaping international trade. Using firm-level data, the ECB blog compares government support in China, the United States and the euro area. We find that subsidies drive Chinese exports in strategically important sectors.Concerns about imbalances in the flow of goods and money have recently resurfaced.[1] The main cause of global…

