Germany's China calculation shifts as import pressures eclipse export benefits

Germany's cautious stance toward China is changing. For years, Berlin avoided taking a hard line against China's unfair trade practices. Recently, this caution has shifted as Beijing's pressure on German exporters has become more evident. In the past year, the EU's goods deficit with China widened to nearly €360 billion per day.

Chinese competitors have closed the technology gap in key industries, posing a significant threat to German manufacturing. German vehicle makers, in particular, have seen a 66% drop in sales to China since 2022, with Chinese electric vehicle manufacturers now competing aggressively in European markets. German car exports to China plummeted by 66% between 2022 and 2025.

German businesses, led by Oliver Richtberg from VDMA, the mechanical engineering association, have demanded a more assertive approach in recent months, stating that they are being deindustrialized through unfair measures. Despite ongoing challenges, the EU has more leverage than it sometimes assumes, and this could be crucial as it navigates the delicate balance between protecting Europe from China's export surplus and avoiding a trade war.