Germany's deficit with China runs

Germany's trade deficit with China is heading for record levels. According to forecasts by the state agency for internationalisation Germany Trade & Invest (Gtai), the deficit will reach EUR 87 billion this year, an increase of around EUR 20 billion compared to 2024. The previous record of 84 billion, which was recorded in 2022, will thus be exceeded.

Back in August, China again became the largest trading partner of the Eurozone's leading economy, partly due to the protectionist policies of US President Donald Trump. For eight years in a row until 2023, China had been Germany's leading partner. In 2024, however, it had been overtaken by the US, not least because Berlin had long since embarked on a path of diversifying its supply chains in order to make itself less dependent, especially for strategic products such as chips and rare earths.

A choice confirmed by the current government, led by the Christian Democrat Friedrich Merz. Putting it into practice is, however, very complicated: this has been demonstrated in recent days by the immediate alarm that has been triggered in German industry (and not only) following Beijing's clampdown on exports of rare earths and chips.

Despite tensions in political relations between Europe and Beijing, with Trump in the White House, the trade balance has changed again.

Germany's trade deficit is partly explained by the decline in German exports, which are expected to fall by more than 11% to around 80 billion. As Christina Otte, deputy director for East Asia at Gtai, explains, 'China is slipping in the ranking of Germany's export markets. This year, it will probably fall back to sixth place, behind Italy'. Until a few years ago, second only to the USA.