Based on official data from the German statistics office, the United States overtook China as Germany’s most important trading partner in the first quarter of this year. 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 just under 60 billion euros.
Commerzbank economist Vincent Stamer explained the first quarter shift: “German exports to the U.S. have now risen further due to the robust economy there, while both exports to and imports from China have fallen.” Structural reasons are also a factor, he said. “China has moved up the value chain ladder and is increasingly producing more complex goods itself, which it used to import from Germany. 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 in its first China strategy announcement last year of “unfair practises”. But Berlin has been vague on policy steps 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 just over 1%, said Juergen Matthes, from German economic institute IW.
“The fact that the Chinese economy is performing worse than many had hoped, while the U.S. economy is exceeding expectations, is presumably contributing to this,” said Matthes. The U.S. now accounts for around 10% of German goods exports. China’s share has fallen to less than 6%, Matthes said. “With a clear global economic headwind for the German economic model, a reorientation – also geopolitically motivated – seems to be taking place: away from system rival China and towards transatlantic partner U.S.,” he added.
It is unclear, however, whether this will continue. “If the White House administration changes after the U.S. elections in November and moves more in the direction of closing off markets, this process could come to a standstill,” said Dirk Jandura, president of the BGA trade association.
