Germany's trade deficit with China widens in the first half of 2026

Germany's trade deficit with China widened to approximately 55 billion euros in the first half of 2026, up from 40 billion euros in the same period of 2025. While China remains Germany's top trading partner, German exports to China fell over 12% to under 37 billion euros as Chinese firms cut reliance on European imports. Meanwhile, German imports from China rose 8.9% to 91.8 billion euros. This growing imbalance, fueled by Chinese technological independence and U.S. tariffs, is severely pressuring German manufacturers like Volkswagen.

Germany-China trade deficit widening

• ▪Total trade between Germany and China exceeded 128 billion euros in the first half of 2026, which was 3 billion euros more than Germany's total trade with the United States.
• ▪Germany's trade deficit with China widened to approximately 55 billion euros in the first half of 2026, up from 40 billion euros during the same period in 2025.

Declining German exports to China

• ▪Far smaller economies, specifically Austria and Switzerland, purchased more German goods than China did in the first half of 2026.
• ▪German exports to China fell by over 12% year-over-year to just under 37 billion euros between January and June 2026, making China Germany's ninth-biggest export market.
• ▪In 2021, China was Germany's second-biggest export market, with Germany selling merchandise worth 104 billion euros to China.

Rising Chinese imports to Germany

• ▪German imports from China rose 8.9% to 91.8 billion euros during the first half of 2026.
• ▪From January to July 2026, China's exports to Germany increased by 18.8% to 79.7 billion dollars, while imports from Germany rose by only 1.1% to 53 billion dollars, resulting in a 27 billion dollar trade surplus for China.
• ▪In July 2026, China's exports to Germany increased by 17.4% year-over-year to 12.3 billion dollars, while China's imports from Germany fell by 2.7% to 7.9 billion dollars.

China's technological independence

• ▪Commerzbank economist Vincent Stamer stated that China's diminishing reliance on Germany indicates that China is becoming more independent of Western powers and catching up technologically.
• ▪Germany Trade & Invest expert Corinne Abele stated that declining German exports to China are driven by China's weak domestic economy and an increasing focus on domestic value chains.

German manufacturing job cuts

• ▪German manufacturing is struggling with Chinese competition and U.S. tariffs, triggering major job cuts at industrial bulwarks such as carmaker Volkswagen.
• ▪German automotive and mechanical engineering sectors are considered particularly affected by growing Chinese competition, with many manufacturers losing market share inside China.

U.S. tariffs on Germany

• ▪German exports to the United States fell about 6% through June 2026 to just over 74 billion euros, while German imports from the United States grew 7.1% to nearly 51 billion euros.
• ▪China overtook the United States as Germany's top trading partner in 2025 after U.S. President Donald Trump returned to the White House and launched protectionist tariff policies.