US Surpasses China as Germany's Leading Trade Partner
In a significant shift in trade dynamics, Germany has recorded a higher volume of goods traded with the United States than with China for the first time since 2016. This development is highlighted in an unpublished report from Germany Trade & Invest (GTAI), which has been made available to the press.
According to preliminary data, Germany's exports and imports with the US soared to approximately EUR255 billion in 2024, surpassing trade with China by around EUR8 billion. The Netherlands, France, and Poland followed as Germany's next most important trade partners.
As the global trade landscape evolves, the report raises concerns regarding how the incoming administration of Donald Trump might influence this vital relationship. The GTAI notes uncertainty regarding the extent to which the US under Trump will target the European Union, including Germany, within its trade policies. There are fears that an escalation in the US-China trade conflict could pressure the German government to align more closely with US interests.
In his campaign, Trump indicated plans to establish a new agency for tariff collection on his first day in office. He proposed replacing federal income tax with tariff revenues and suggested significant increases in import duties, projecting a general 10% tariff on imports and a staggering 60% on goods from China.
While trade with the US has flourished, Germany's overall foreign trade saw a decline in 2024, with a decrease of one to two percent overall. The downturn was particularly pronounced in trade with China, which fell by approximately 6.4%. This decline was largely attributed to reduced demand for vehicles and automotive parts from China, reflecting a sluggish Chinese economy in contrast to the robust recovery and investment-driven growth in the US.
In light of these challenges, German companies are increasingly looking for alternatives to their dependence on the Chinese market. According to the study, there has been a notable increase in trade with Vietnam, which surged by over 11% in 2024. Furthermore, Poland has emerged as an important market, while trade with the United Kingdom has shown signs of recovery following Brexit.
