In the first quarter of this year, the United States surpassed China as Germany’s primary trading partner, according to Reuters’ analysis of data from the German statistics office. The combined value of Germany’s exports and imports with the U.S. amounted to €63 billion ($68 billion) between January and March, while trade with China reached just under €60 billion.
In 2023, China was Germany’s top trading partner for the eighth year in a row, with volumes reaching 253 billion euros, although that was only a few hundred million ahead of the U.S.
“German exports to the U.S. have now risen further due to the robust economy there, while both exports to and imports from China have fallen,” said Commerzbank economist Vincent Stamer, explaining the first quarter shift.
Structural reasons are also a factor, he said.
“China has moved up the value chain ladder and is increasingly producing more complex goods itself, which it used to import from Germany,” said Stamer. “In addition, German companies are increasingly producing locally instead of exporting goods from Germany to China.”
Germany aims to lessen its reliance on China, highlighting political differences and accusing Beijing of “unfair practices” in its first China strategy announcement last year. However, Berlin has remained unclear about the specific policies it will use to reduce these dependencies.
German imports of goods from China fell almost 12% year-on-year in the first quarter, while exports of goods to China fell just over 1%, said Juergen Matthes, from German economic institute IW.
“The fact that the Chinese economy is performing worse than many had hoped, while the U.S. economy is exceeding expectations, is presumably contributing to this,” said Matthes.
The US now accounts for around 10% of German goods exports. China’s share has fallen to less than 6%, Matthes said.
“With a clear global economic headwind for the German economic model, a reorientation – also geopolitically motivated – seems to be taking place: away from system rival China and towards transatlantic partner U.S.,” he added.
It is unclear, however, whether this will continue.
“If the White House administration changes after the US elections in November and moves more in the direction of closing off markets, this process could come to a standstill,” said Dirk Jandura, president of the BGA trade association.
($1 = 0.9303 euros)
With Inputs from Reuters
