China remains Germany's most important trading partner – exports to the USA plummet

Exports to the United States have declined noticeably according to the available figures. Economist Sebastian Dullien, scientific director of the Institute for Macroeconomics and Economic Research (IMK), explained that both China and the USA are attempting "mit aggressiver Handels- und Industriepolitik, ihre eigene Industrie zu stützen und ausländische Anbieter aus ihrem Markt zu verdrängen".

Overall growth in German exports was driven primarily by robust increases in deliveries to other EU countries, according to the Federal Statistical Office. France and the Netherlands rank among the most important European buyers of German goods.

Background: Shifts in global trade

These shifts are taking place against the backdrop of a phase of heightened trade-policy tensions between Western industrialized countries and China. Tariffs, export controls on sensitive technologies, and public procurement rules have shaped competition between the major economic blocs for several years now.

For the German economy, China's continued dominance as a trading partner has a twofold significance: On one hand, the enormous sales market in Asia secures employment in export-strong sectors such as automotive, mechanical engineering, and the chemical industry. On the other hand, vulnerability to political countermeasures from Beijing is growing.

Dullien sees a structural risk in the current developments. If both sides – Washington and Beijing – systematically favored their own suppliers, the multilateral trade framework would come under further pressure. As an exporting nation, Germany would be particularly affected.

Outlook: What the coming quarters could bring

Regardless of the shifts, the Netherlands remains a central trading partner in bilateral terms. The port of Rotterdam serves as the most important transshipment hub for German exports that travel beyond the EU's external borders to third countries. France and Belgium follow in the next positions.

Observers see the data as an indication that German foreign trade is changing in two directions simultaneously: away from a one-sided orientation toward the US market and toward a stronger anchoring in the EU single market – without the traditional overseas relationships, particularly with China, losing their significance.

For the coming quarters, economic researchers do not expect a rapid easing. If the dispute over tariffs and subsidies continues, growth in German exports overall is likely to remain subdued – with tangible consequences for industrial production, investment, and the labor market.

The Federal Statistical Office re-evaluates the foreign trade data on a monthly basis. The current figures also feed into the forecasts of leading economic research institutes, which regularly adjust their economic assessments to reflect developments in export markets.