Weak domestic demand rather than U.S. tariffs is the main reason China is dumping surplus products on European markets at rock-bottom prices at the expense of domestic producers, a European Central Bank study argued on Tuesday.

Pressure has been growing on the European Union to act on surging imports from China as U.S. tariffs force Beijing to find new markets for products it now struggles to sell.

“Escalating trade tensions between the United States and China might result in a further diversion of Chinese exports to Europe,” the ECB argued in an Economic Bulletin article.

“However, the rise in China’s exports to the EU predates the latest tensions and coincides instead with the onset of weakness in domestic demand in China,” the ECB added.

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