According to forecasts from Germany Trade & Invest (GTAI), a state-run agency for international economic promotion, the deficit in the value of exports versus imports will surpass the previous record of just over €84 billion in 2022.
“This is an imbalance, and it’s certainly not in our interest,” said Christina Otte, GTAI’s regional deputy director, in remarks shared with Reuters.
China Regains Lead as Germany’s Top Trading Partner
Trade relations between Berlin and Beijing are undergoing significant shifts. Following changes in global trade flows triggered by U.S. President Donald Trump’s tariffs, China reclaimed its position as Germany’s largest trading partner in the first eight months of 2025. The U.S. had briefly overtaken China in 2024 after an eight-year streak of Chinese dominance.
But the renewed trading strength comes with challenges for Germany. While Chinese imports into Europe’s largest economy have surged, German exports to China have continued to weaken sharply, exposing the structural vulnerabilities of Berlin’s industrial base.
Weak German Exports, Rising Chinese Imports
GTAI expects German exports to China to fall by more than 11% this year, pushing China down to sixth place among Germany’s export markets—behind Italy—for the first time in over a decade.
“China is slipping as a customer market,” Otte said. “Just a few years ago, it was second only to the United States.”
Meanwhile, imports from China have increased significantly, partly due to trade diversion effects following Washington’s steep tariffs on Chinese goods. With U.S. demand weakening, more Chinese products have found their way into Europe.
Chinese data from January to September show exports to the United States fell 17%, while shipments to Germany rose 11% over the same period.
Germany’s Efforts to Reduce Dependency
Berlin has been working to diversify supply chains and lessen its dependency on China for critical inputs such as semiconductors, batteries, and rare earth elements. These efforts aim to make the German economy less vulnerable to trade tensions and supply disruptions.
However, progress has been slow, and diplomatic strains persist. Germany’s foreign minister recently cancelled a planned trip to China at short notice, signaling continued friction between the two nations despite their deep economic ties.
Broader Implications for Europe
The record deficit underscores a growing dilemma for Europe’s powerhouse economy: how to maintain access to China’s vast manufacturing output while protecting its own industrial competitiveness.
As Chinese goods flood European markets and German exports lose momentum, Berlin faces mounting pressure to recalibrate its trade and industrial policies.
Economists warn that if current trends continue, Germany’s long-standing model of export-driven growth could face its most serious test yet.