In the initial half of the year, China trailed marginally behind the US as Germany's primary trading partner.
Germany's trade relations with its major partners, the USA and China, continue to evolve, with each nation playing a significant role in the European economy.
In the first half of the year, goods worth 125 billion euros were traded between Germany and the USA, making it the country's most important trading partner. However, the surcharge of 15 percent on most EU goods in the USA is making German goods more expensive, potentially impacting export growth.
Despite this, the USA overtook China as Germany's most important trading partner in 2024, a position China held from 2016 to 2023. The trade data, preliminarily evaluated by the news agency Reuters, shows that German exports to the U.S. have shown mixed trends, with specific sectors like iron and steel seeing slight declines, while overall export surpluses to the U.S. remain strong.
On the other hand, trade with China has grown robustly, nearly matching or surpassing the U.S. due to China’s role as a critical market and manufacturing hub. Germany’s trade with China is part of broader eastern trade growth, including Central and Eastern Europe, which saw significant increases, underpinning the importance of these regions in German trade policy.
The impact of President Trump’s trade policies, mainly tariffs and trade tensions from 2018-2020, has shifted but not fundamentally reversed these trends. While some American tariffs pressured German exports to the U.S., Germany’s diversified trade strategy, including strengthened ties with China and the EU’s eastern neighbors, has mitigated adverse impacts.
By 2025, tensions have stabilized, but uncertainties continue to weigh on export growth and investment, causing Germany’s economy to stagnate in early 2025 with a projected mild recovery in 2026. Commerzbank economist Vincent Stamer expects that the new US tariffs could slow down German exports to the USA by 20 to 25 percent in the next two years, potentially leading to a decrease in German exports to the USA by a significant amount.
Interestingly, Stamer predicts that the new US tariffs could allow China to regain the top position among German trading partners later this year. As it stands, China is the second most important trading partner for Germany, narrowly behind the US. A year ago, the US lead over China in terms of trade with Germany was around five billion euros. The People's Republic of China trades around 123 billion euros with Germany in the first half of the year.
This outlook reflects the balance Germany maintains between economic relations with the U.S. and China amid geopolitical trade shifts and ongoing global economic pressures. The trade figures provided include both exports and imports, with German exports to the USA declining by 3.9 percent to 77.6 billion euros in the first six months of the year. The data was released by the Federal Statistical Office on Friday.
In conclusion, while the USA remains Germany's most important trading partner, the growth in German trade with China is noteworthy and could potentially lead to a shift in the trading relationship between the two nations. The ongoing impact of tariffs and trade tensions, particularly those initiated by President Trump, continue to influence these trends, underscoring the need for Germany to maintain a diversified trade strategy.
The ongoing trade tensions and tariffs, particularly those initiated by President Trump, are influencing the trading relationship between Germany and the USA, potentially leading to a significant decrease in German exports to the USA. Meanwhile, China, as a critical market and manufacturing hub, has witnessed a robust growth in trade with Germany, and could potentially regain the top position among German trading partners. These trends highlight the importance of diversified trade strategies for small and medium-sized undertakings in Germany's industry, finance, and business sectors, given the evolving trade relations with major partners like the USA and China.
