US surpasses China as Germany's top trading partner amid shifting global dynamics
In the first quarter of 2024, the United States surpassed China in terms of trade turnover with Germany, as reported by foreign media. Thus, the USA has become the most critical partner for our western neighbour.
China is no longer Germany's largest trading partner—the United States has taken the lead. According to estimates based on data from the German Federal Statistical Office, trade between the USA and Germany in the first quarter of this year amounted to £56 billion. Meanwhile, trade between Germany and China during the same period was less than £56 billion (approximately £53 billion). China has been Germany's largest trading partner for the past eight years.
Why has there been a change in leadership?
In a comment for Reuters, Commerzbank economist Vincent Stamer pointed out that German exports to the USA are growing due to the revival of the American economy, while exports to and imports from China are decreasing.
He also noted that China is producing increasingly advanced goods that it used to import from Germany. Moreover, more and more German companies are starting production in China and no longer need to export goods from their country to this market.
According to Allianz Trade analysts, China and Germany are increasingly competing with each other. Chinese competition threatens German dominance in key export sectors, while Germany's dependence on Chinese imports is growing. Experts point out that trade relations may be at risk despite the German Chancellor's recent trip to China.
Easing ties with China
According to CNBC, the European policy of "de-risking" also influences Germany's trade separation from China. It aims to increase Europe's resilience and security by reducing its economic dependence on China.
CNBC quoted a study conducted by the German Ifo Economic Institute. The results of this study indicate that the number of firms that claim they are dependent on China has decreased from 46 percent in February 2022 to 37 percent in February 2024.
US-China relations also play a significant role here. Recall that in 2018, then-President Donald Trump initiated a trade war with China by imposing tariffs on Chinese exports. The main point of contention for both sides was the export of American production to China.
