Germany's trade deficit with China widens as exports slide

Germany's trade deficit with China expanded significantly in the first half of 2026, even as China remained its largest overall trading partner. New data from Germany Trade & Invest (GTAI) shows German exports to China fell by more than 12% year-on-year to just under €37 billion between January and June.

This decline marks a notable shift in trade relations. As recently as 2021, China was Germany's second-largest export market, with merchandise sales reaching €104 billion that year. Now, China ranks only ninth as a destination for German goods.

German imports from China, meanwhile, rose 8.9% to €91.8 billion during the same period. The resulting trade deficit grew from €40 billion in the first half of 2025 to roughly €55 billion this year. Total bilateral trade exceeded €128 billion, about €3 billion more than Germany's trade with the United States.

GTAI East Asia expert Corinne Abele attributed the falling exports to China's weak domestic economy and a growing focus on domestic value chains. German companies are increasingly producing within China itself, while the country's property crisis and strained regional governments are limiting investment.

Smaller European economies such as Austria and Switzerland have purchased more German goods than China in 2026, according to the data. Commerzbank economist Vincent Stamer noted that China's reduced reliance on German products reflects its growing technological independence from Western powers.

The United States remains Germany's single largest foreign market, though exports there fell about 6% to just over €74 billion through June. German imports from the U.S. grew 7.1% to nearly €51 billion. Overall, German exports rose 3.7% to €817 billion in the first half, supported by global demand.

Stamer cautioned that the 'Made in Germany' brand must still reinvent itself amid these shifting trade patterns.