US overtakes China as Germany's top trading partner

Published 05/09/2024, 03:04 AM
Updated 05/09/2024, 03:15 AM
© Reuters. Container ships are loaded at a loading terminal in the port of Hamburg Germany October 28, 2019. REUTERS/Fabian Bimmer/File Photo
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By Rene Wagner and Maria Martinez

BERLIN (Reuters) - The United States overtook China as Germany's most important trading partner in the first quarter of this year, according to Reuters' calculations based on official data from the German statistics office.

Germany's trade with the United States - exports and imports combined - totalled 63 billion euros ($68 billion) from January to March, while the figure for China was just under 60 billion euros, the data showed.

In 2023, China was Germany's top trading partner for the eighth year in a row, with volumes reaching 253 billion euros, although that was only a few hundred million ahead of the U.S.

"German exports to the U.S. have now risen further due to the robust economy there, while both exports to and imports from China have fallen," said Commerzbank (ETR:CBKG) economist Vincent Stamer, explaining the first quarter shift.

Structural reasons are also a factor, he said.

"China has moved up the value chain ladder and is increasingly producing more complex goods itself, which it used to import from Germany," said Stamer. "In addition, German companies are increasingly producing locally instead of exporting goods from Germany to China."

Germany has said it wants to reduce its exposure to China, citing political differences and accusing Beijing in its first China strategy announcement last year of "unfair practises". But Berlin has been vague on policy steps to reduce dependencies.

German imports of goods from China fell almost 12% year-on-year in the first quarter, while exports of goods to China fell just over 1%, said Juergen Matthes, from German economic institute IW.

"The fact that the Chinese economy is performing worse than many had hoped, while the U.S. economy is exceeding expectations, is presumably contributing to this," said Matthes.

The U.S. now accounts for around 10% of German goods exports. China's share has fallen to less than 6%, Matthes said.

"With a clear global economic headwind for the German economic model, a reorientation - also geopolitically motivated - seems to be taking place: away from system rival China and towards transatlantic partner U.S.," he added.

It is unclear, however, whether this will continue.

© Reuters. FILE PHOTO: A German flag blows in the wind in front of a stack of containers at the harbour in Hamburg, Germany, February 24, 2022. REUTERS/Fabian Bimmer/File Photo

"If the White House administration changes after the U.S. elections in November and moves more in the direction of closing off markets, this process could come to a standstill," said Dirk Jandura, president of the BGA trade association.

($1 = 0.9303 euros)

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