The flags of the United States and Germany are hoisted on the table during the bilateral meeting between German Economics Minister Herbeck and U.S. Secretary of State Blinken at the Gendarmenmarkt hotel. Photo: Christoph Soeder/dpa (Photo Credit: Christoph Soeder/picture Alliance via Getty Images)
Christoph Soeder/DPA | Picture Alliance | Getty Images
China has been Germany’s main trading partner for years, but as this year progresses, the United States appears to be quietly usurping its top spot.
Total imports and exports between Germany and the United States reached 63 billion euros ($68 billion) from January to March 2024, according to CNBC calculations. Meanwhile, trade between Germany and China amounted to just under 60 billion euros. Reuters first reported the change on Thursday.
Carsten Brzeski, global head of macro research at ING Research, told CNBC that several factors influenced the move.
“This change is the result of several factors: strong growth in the United States has boosted demand for German products. […] At the same time, German exports to China have declined due to decoupling from China, weak domestic demand in China, and China’s ability to produce products (mainly cars) that it previously imported from Germany. Stated.
China has long been Germany’s largest trading partner, but the gap between China and the United States has narrowed in recent years. Holger Schmieding, chief economist at Berenberg Bank, told CNBC that the United States has long been a bigger market for German exports than China.
The United States’ share of Germany’s exports has increased in recent years, but China’s share has declined, he noted. “The Chinese economy is stagnant and German companies face increasing competition from subsidized Chinese companies,” Schmieding said.
The main difference, he noted, is that the United States is now also more important when it comes to imports.
Germany is pursuing a new China strategy, urging companies last year to “de-risk” from China. Although Beijing has stressed that China remains Germany’s partner and that there should be no “decoupling,” “systemic conflict” is increasingly characterizing relations between the two countries.
Tensions are also rising between the European Union and China, with both countries launching investigations into each other’s trade practices and threatening to impose tariffs on imports.
A survey conducted last month by Germany’s economic institute Ifo found that the proportion of companies that said they were dependent on China had fallen from 46% in February 2022 to 37% in February 2024. This is related to a decline in the number of companies relying on inputs from China. Manufacturers state in the report:
“The fact that the United States has become Germany’s largest trading partner certainly indicates a change in trade patterns and a gradual decoupling from China,” Brzeski said.
