German trade deficit with China grows as Beijing relies less on European industry

Berlin, on August 9, received preliminary data from Germany Trade & Invest (GTAI) indicating that Germany's trade deficit with China increased in the first half of 2026. Despite remaining China's top trade partner, German exports to China declined by 12% year-on-year to nearly €37 billion during the period. This drop comes as Chinese firms reduce their reliance on European imports, making China only the ninth-largest market for German goods.

Previously, China ranked as the second-largest export market for Germany in 2021, with imports valued at €104 billion. However, recent challenges faced by German manufacturing, such as U.S. tariffs and competition from China, have resulted in job losses at key industries like Volkswagen. China, on the other hand, is increasingly exporting to Germany, with the trade deficit widening from €40 billion in the first half of last year to approximately €55 billion in the same period this year.

German imports from China rose by 8.9% to €91.8 billion, while total trade reached over €128 billion, €3 billion more than Germany's trade with the United States. Experts attribute the decline in German exports to China to the weak domestic economy and China's growing focus on domestic value chains. Additionally, China's property crisis and cash-strapped regional governments have further curtailed investments.

Although China's dependence on Germany is decreasing, it is becoming more technologically independent. Commerzbank economist Vincent Stamer notes that China is now a larger trading partner for smaller economies like Austria and Switzerland than for China itself. China surpassed the U.S. as Germany's top trading partner in 2025, driven by U.S. President Donald Trump's return to office and the implementation of protectionist tariff policies that adversely affected German exports to the United States.

The U.S. remains Germany's largest foreign market, but exports to it dropped by around 6% to nearly €74 billion, while German imports from the U.S. increased by 7.1% to nearly €51 billion. France and the Netherlands are the next-largest export markets. Despite a 3.7% rise in German exports to €817 billion, the 'Made in Germany' brand still needs to adapt, according to Stamer.