China is about to become Germany’s largest trading partner in the first half of 2025.
Early data published by the German statistics office indicate that China and the United States are slowly catching up as the gap continues to close. This shift is caused by German exports into the US faltering due to new American tariffs, leaving China with a space to move in.
Narrow lead for the US
As an industry leader, the United States has been able to take the lead in trade with Germany, albeit by a thin margin. Tariffs imposed by the Trump administration on German exports to the US have been connected to a 3.9 percent decline in the exports during the first half of 2025. The volume of imports of China rose 10.7 percent year-on-year, surpassing 80 billion euros. The analysts see this as a redirection of Chinese trade with the US to Europe, and it facilitated this through the undervaluation of the yuan against the euro.
Germany’s trade deficit with China widens
Imports from China grew by 30 percent, whereas German exports to China dropped by 14.2 percent to 41.4 billion euros. This drop is attributed to the rise in competition brought about by Chinese manufacturers. This has made the trade deficit between Germany and China reach approximately 40 billion euros, which is tied with a previous record in 2022. According to economists, this deficit may worsen if the trends remain unchanged.
Tariffs reshape global trade patterns
Economists believe tariffs imposed in the US will decelerate German exports by 5 to 7 percent in the coming two years. This would give China an increased chance of topping the US in German trade ratings. The change belongs to an overall reorganization of world commerce since Donald Trump’s second coming. Tariffs have undermined transatlantic trade, and governments have been compelled to strategize to safeguard their economic interests.
Outlook for world trade
According to the World Trade Organization, the world merchandise trade is likely to shrink by zero point two percent by 2025. North America is even expected to experience a decline in exports by around 12.6 percent. WTO cautions that tensions are bound to increase, leading to a global downturn of 1.5 percent. Also, the risks of open economies dependent on trade are noted through the Brookings-FT Tracking Indexes to monitor global economic recovery. Analysts have warned that the extended period of uncertainty may be a heavy burden to global growth across both the developed and developing markets.
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