Berlin, January 30, 2024 – China’s once-dominant grip on German trade is loosening fast, with a stunning 15% decline in total trade value last year, according to a report by Germany Trade and Invest (GTAI). This dramatic shift, fueled by China’s economic woes and German companies’ strategic moves, could see the US take the top spot as Germany’s main trading partner as early as 2024.
The report paints a sobering picture of a bilateral trade relationship in freefall. China’s internal headwinds—a property crisis, geopolitical tensions, and dwindling industrial investment—are dampening demand for German goods and services. Adding fuel to the fire, German companies are actively diversifying their strategies, both by reducing reliance on China for sourcing and by prioritizing the “in China for China” approach, catering directly to the domestic market.
These combined forces have triggered a significant dip in both imports and exports. Imports from China plummeted by 19%, with particularly steep declines in chemicals (70% drop) and consumer goods like furniture, textiles, and clothing. The one bright spot in German imports from China was motor vehicles, which surged by almost 36%.
On the export front, China’s waning allure translated into sharp drops for German cars, chemicals, and pharmaceuticals. Despite remaining Germany’s fourth-largest buyer market, China’s diminishing importance is undeniable.
The US, meanwhile, is unexpectedly thriving, emerging as a potential challenger to China’s throne. Depending on the specific calculations, the US now trails China by a mere €1 to €2 billion, setting the stage for a historic potential swap in 2024.