Germany's trade deficit with China widened to about €55 billion in the first half of 2026 as German exports fell more than 12% and China slipped to the ninth-biggest market for German goods, according to preliminary data from Germany Trade & Invest. Chinese firms are buying less from German industry while selling more into Germany, a reversal from 2021, when China was still Germany's second-biggest export market.
Germany's trade deficit with China swelled to about €55 billion in the first half of 2026, up from €40 billion in the same period a year earlier, according to preliminary data from state-run agency Germany Trade & Invest (GTAI) published Sunday. China remained Germany's top trade partner overall, but German exports to China fell more than 12% year-on-year to just under €37 billion between January and June, as Chinese firms cut their reliance on European imports.
The decline pushed China down to the ninth-biggest market for German goods — a sharp drop from 2021, when China was the second-biggest export market and bought €104 billion of German merchandise despite the pandemic. German manufacturing is now struggling with both U.S. tariffs and Chinese competition, triggering major job cuts at industrial bulwarks such as carmaker Volkswagen.
Weak demand and China's own supply chains
GTAI East Asia expert Corinne Abele said the weak domestic economy and China's growing focus on its own value chains are driving the export decline. German firms are producing more inside China itself, she added, while China's property crisis and cash-strapped regional governments are curbing investment. Far smaller economies such as Austria and Switzerland bought more German goods than China did in 2026.
Beijing sells more into Germany
China, meanwhile, is selling more into Germany. German imports from China rose 8.9% to €91.8 billion over the period. Total trade between the two countries topped €128 billion, about €3 billion more than Germany traded with the United States. That shift shows China becoming more independent of Western powers and catching up technologically, according to Commerzbank economist Vincent Stamer.
A reshuffled trade map
China overtook the United States as Germany's top trading partner in 2025, after U.S. President Donald Trump returned to the White House and launched protectionist tariff policies that eroded German exports to the United States. The U.S. remains Germany's single-biggest foreign market, but exports there fell about 6% through June to just over €74 billion, Abele said. German imports from the U.S. grew 7.1% to nearly €51 billion over the same period. France and the Netherlands were the next-biggest export markets, and overall German exports rose 3.7% to €817 billion through June as global growth kept orders flowing.
According to Commerzbank economist Vincent Stamer: "But the ’Made in Germany’ brand must still reinvent itself."
Source: Economic Indicators News
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