The US surpasses China as Germany's top trading partner in 2024 shift
11 May 2024 13:43
As foreign media reported, in the first quarter of 2024, the United States outpaced China in terms of trade turnover with Germany. Thus, the USA has become the most important 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 three months of the year amounted to approximately 68 billion USD. Meanwhile, trade between Germany and China during the same period was less, around 65 billion USD.
China had been Germany's largest trading partner for the past eight years. What prompted this shift in leadership?
In a comment for Reuters, Commerzbank economist Vincent Stamer explained that German exports to the USA are currently on the rise due to the revitalization of the American economy, while exports to and imports from China are declining.
He also highlighted that China now produces more sophisticated goods than it previously imported from Germany. Furthermore, many German companies are starting production in China, eliminating the need to export goods from Germany to that market.
According to Allianz Trade analysts, Germany and China are increasingly competing against each other. Chinese competition threatens German leadership in key export sectors, while Germany's reliance on Chinese imports is growing.
The situation does not bode well for Germany. Experts suggest that despite the recent visit of the German Chancellor to China, the trade relations between these two countries might be jeopardized.
Easing ties with China
According to CNBC, the European " de-risking " strategy also contributes to Germany's trade distancing from China. Its goal is to bolster Europe's resilience and security by reducing its economic dependencies on China.
CNBC referenced a study carried out by the German Ifo Economic Institute. The findings of this study show that the percentage of firms claiming dependency on China has dropped from 46 per cent in February 2022 to 37 per cent in February 2024.
The dynamics between the US and China also significantly influence this scenario. Remember that in 2018, then-President Donald Trump launched a trade war with China by imposing tariffs on Chinese exports. The core issue for both sides was exporting American products to China.
