China becomes Germany’s top trading partner again despite growing trade deficit

For the first time on record, Germany is expected to post a trade deficit of €87 billion, approximately $101.46 billion, with China in 2025, according to the state-owned economic promotion agency Germany Trade & Invest (GTAI).

The trade gap is set to be even larger than the 84 billion euros recorded in 2022. GTAI’s regional deputy director, Christina Otte, stated that the imbalance is not beneficial for Germany and that efforts to rectify it have been unsuccessful so far.

China becomes Germany’s top trading partner again 

Analysts say U.S. President Donald Trump’s trade tariffs increased the cost of imports and interfered with normal trade routes between the world’s largest economies.

These changes in trading policies forced Chinese companies to seek alternative buyers outside the United States, and most of their products ultimately end up in Europe, particularly in Germany. As a result, China displaced the U.S. as Germany’s biggest trading partner, and the relationship between the two countries has even grown stronger.

However, Berlin still aims to reduce its dependence on Chinese goods and establish more balanced trade ties with other countries, as its exports to China have decreased significantly. Data from GTAI indicates that German exports to the Asian country could drop by more than 11% year. Otte even said China could fall to sixth place, behind Italy, after being Germany’s second-largest export destination behind the United States.

Chinese industries can now produce most of the goods that Germany once sold to them, so they don’t have to rely on imports from abroad. As a result, German manufacturers must either partner with Chinese companies or seek other markets in Asia to fill the gap.

Berlin officials said their progress in building stronger supply chains with other countries is slow because China already dominates their market, with many of its goods entering the country at an alarming rate.

Chinese imports increase as U.S. tariffs affect global trade

U.S. President Donald Trump’s tariff policies have made it difficult and more expensive for Chinese companies to succeed in the American market. This has compelled the Asian country to export most of its products to Europe, particularly to Germany. Chinese customs data indicate that exports from China to the U.S. dropped by 17% from January to September 2025, while exports to Germany increased by 11% during the same period.

German manufacturers are struggling to compete with Chinese products because they are cheap and cover a wide range of goods. Some of these producers are afraid that people will lose their jobs, and local industries will experience stunted growth as Chinese companies continue to expand with their massive production capacity and low prices. 

Berlin has sought trading partners throughout Europe and other Asian countries, but finding alternative suppliers would take years and incur significant costs, as Chinese companies already provide quality products at competitive prices.

The diplomatic relations between Germany and China are also facing tension, especially after Germany’s foreign minister cancelled his visit to Beijing. Business leaders say Germany could struggle even more to operate in China or rely on stable deliveries from the country’s suppliers if the political tension spills over into trade. 

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