The latest data from the Federal Statistical Office of Germany shows that in May, Germany’s exports to China decreased by 14.0% compared to the same month last year, amounting to 7.5 billion euros. Overall, Germany’s exports to non-EU countries have seen a significant decline, mainly attributed to reduced demand from China.
Economists believe there are several reasons for the sluggish trade between Germany and China. Firstly, China may now be producing higher quality products domestically that were previously imported from Germany. Secondly, German companies are increasingly shifting production to China. Political tensions such as the Taiwan dispute may further reinforce this trend.
Against this backdrop, China is no longer Germany’s most important trading partner. In 2023, China held the position of Germany’s largest trading partner for the eighth consecutive year with a trade volume of approximately 253 billion euros, only slightly higher than the United States. However, in the first quarter of this year, the US has surpassed China in Germany’s goods trade.
According to preliminary information from the Federal Statistical Office, Germany’s exports to countries outside the EU in May amounted to 58.6 billion euros, a 6.4% decrease compared to the previous year. Trade with these non-EU countries accounts for nearly half of Germany’s total exports.
The United States remains the most important buyer of “Made in Germany” goods, with exports to the US reaching 13 billion euros in May, an increase of 4.1% compared to the previous year. On the other hand, exports to the UK decreased by 1.7% to 6.3 billion euros; Switzerland ranked fourth among Germany’s most important non-EU trading partners with a volume of 5.6 billion euros; followed by Turkey at 2.2 billion euros; and South Korea and Japan each at 1.5 billion euros. Germany’s exports to Turkey and Japan have also experienced significant declines.
German media reports suggest that the relationship between Germany and China may deteriorate further. The EU plans to impose punitive tariffs on Chinese electric cars, leading to a very tense trade situation between the two. German Deputy Chancellor and Minister of Economic Affairs, Haubek, expects the conflict not to be resolved during his trip to China. During his first stop in South Korea on his East Asia tour, Haubek stated, “We don’t see any huge opportunities there (in China). The possibility of resolving conflicts in China can be ruled out.”