German trade deficit with China widens as exports slide

Germany's trade deficit with China widened significantly in the first half of 2026, even as China remained its largest overall trading partner. New preliminary 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 pushed China down to ninth place among destinations for German goods — a sharp fall from its position as the second-largest export market as recently as 2021, when Germany sold €104 billion worth of merchandise to the Asian nation.

Meanwhile, imports from China rose 8.9% to €91.8 billion over the same period. The result was a trade deficit of roughly €55 billion, up from about €40 billion in the first half of the previous 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 export slump to China's weak domestic economy and a growing focus on domestic value chains. German companies are increasingly producing inside China itself, while the country's property crisis and cash-strapped regional governments are curbing investment.

Smaller economies such as Austria and Switzerland now buy more German goods than China does. Commerzbank economist Vincent Stamer said China's reduced reliance on German industry reflects its growing technological independence from Western powers.

The shift comes as China overtook the US as Germany's top trading partner in 2025, following US tariff policies that eroded German exports to America. The US remains Germany's single-largest foreign market, but exports there fell about 6% to just over €74 billion through June. Imports from the US grew 7.1% to nearly €51 billion.

Overall German exports rose 3.7% to €817 billion in the first half, buoyed by global demand. Still, Stamer cautioned that the 'Made in Germany' brand must reinvent itself to stay competitive.