The United States overtook China as Germany’s largest trading partner in the first quarter of this year, according to Reuters calculations based on official data from the German statistics office.
Germany’s trade with the United States – exports and imports combined – totaled 63 billion euros ($68 billion) from January to March, while the figure for China was slightly lower at 60 billion. euros, according to the data.
In 2023, China was Germany’s top trading partner for the eighth consecutive year, with volumes reaching 253 billion euros, although it was only ahead of the United States by a few hundred million.
“German exports to the United States increased further due to the robust American economy, while exports and imports from China decreased,” said Vincent Stamer, economist at Commerzbank, to explain the change that occurred in the first quarter.
Structural reasons also come into play.
“China has moved up the value chain and is itself producing more and more of the complex goods that it used to import from Germany,” Stamer said. “In addition, German companies are increasingly producing locally instead of exporting goods from Germany to China.
Germany has said it wants to reduce its exposure to China, citing political differences and accusing Beijing of “unfair practices” in its first China strategy announced last year. But Berlin has remained vague on the political measures to be taken to reduce dependencies.
German imports of goods from China fell almost 12% year-on-year in the first quarter, while exports of goods to China fell by just over 1%, said Juergen Matthes of the German Economic Institute IW.
“The fact that China’s economy is performing worse than many expected, while the U.S. economy is outperforming expectations, is likely contributing,” Mr. Matthes said.
The United States now accounts for around 10% of German merchandise exports. China’s share has fallen to less than 6%, according to Mr. Matthes.
“As the German economic model is clearly facing headwinds, a reorientation – also motivated by geopolitical reasons – seems to be taking place: from China, rival of the system, towards the United States, transatlantic partners”, he said. he adds.
However, it is not certain that this reorientation will continue.
“If the White House administration changes after the US elections in November and moves more towards closing the markets, this process could stop,” said Dirk Jandura, president of the BGA trade association.
($1 = 0.9303 euros) (Reporting by Maria Martinez and Rene Wagner; Editing by Miranda Murray and Mark Potter)
