German trade deficit with China grows as Beijing relies less on European industry

BERLIN: Germany’s trade deficit with China widened ‌in the first half of 2026, even as the Asian powerhouse remained its top trade partner, preliminary data from state-run agency Germany Trade & Invest (GTAI) showed on Sunday.

German exports to China fell over 12% year-on-year to just under €37 billion ​between January and June, the data showed, as Chinese firms cut reliance on European imports, ​making China only the ninth-biggest market for German goods.

As recently as 2021, China was ⁠the second-biggest export market. That year, Germany sold China merchandise worth €104 billion, despite the effects of ​the pandemic.

Now, German manufacturing is struggling with both US tariffs and Chinese competition, triggering major job cuts ​at bulwarks of industry such as carmaker Volkswagen.

China, though, is selling more and more to Germany.

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In the first half of last year, Germany ran a trade deficit of €40 billion with China. That had swelled to some €55 billion during the same ​period this year.

German imports from China rose 8.9% to €91.8 billion over the period. Total trade was over €128 ​billion, €3 billion more than with the United States.

“The reasons for declining exports to China are the weak domestic economy ‌and ⁠increasing (Chinese) focus on domestic value chains,” said GTAI East Asia expert Corinne Abele.

German firms are now producing more inside China itself, while China’s property crisis and cash-strapped regional governments are curbing investment, Abele added.

Far smaller economies like Austria and Switzerland have bought more German goods than China in 2026, the data showed.

China’s ​diminishing reliance on Germany ​showed it is becoming ⁠more independent of Western powers and catching up technologically, said Commerzbank economist Vincent Stamer.

China overtook the U.S. as Germany’s top trading partner in 2025 after ​U.S. President Donald Trump returned to the White House and launched protectionist tariff ​policies that ⁠have eroded German exports to the United States.

The U.S. remains Germany’s single-biggest foreign market, but exports there fell about 6% through June to just over €74 billion, Abele said. By contrast, German imports from the U.S. grew ⁠7.1% ​to nearly €51 billion.

France and the Netherlands were the next biggest ​export markets. Overall, German exports rose 3.7% to €817 billion through June as global growth kept orders flowing.

“But the ‘Made in Germany’ brand must ​still reinvent itself,” said Commerzbank’s Stamer.