China Reclaims Top Spot as Germany's Largest Trading Partner Amid US Tariff Impact

Shifting Trade Dynamics in Early 2025

China has once again emerged as Germany's largest trading partner in the first eight months of 2025, surpassing the United States. Preliminary data from the German statistics office indicates that total trade between Germany and China amounted to €163.4 billion from January to August. In contrast, trade with the United States reached €162.8 billion during the same period.

This development marks a reversal from 2024, when the United States briefly held the position of Germany's top trading partner, ending an eight-year streak for China.

Impact of US Tariff and Trade Policy

The primary driver behind this shift is attributed to the renewed US tariff and trade policy, which has significantly impacted German exports to the United States. A trade deal implemented on August 1, 2025, saw the United States impose a 15 percent tariff on most European Union exports, with tariffs on automobiles reaching 25 percent. Additionally, tariffs on iron, steel, and aluminum products, which were increased to 25 percent on March 12, 2025, were further raised to 50 percent on June 4, 2025.

German exports to the United States experienced a notable decline of 7.4 percent in the first eight months of 2025 compared to the previous year, totaling €99.6 billion. The trend accelerated in August, with exports to the US plummeting by 23.5 percent year-on-year. Dirk Jandura, president of the BGA foreign trade association, stated, 'There is no question that US tariff and trade policy is an important reason for the decline in sales.' Demand for traditional German export goods, such as cars, machinery, and chemicals, has reportedly fallen.

Trade Flows with China and Future Outlook

While German exports to China also saw a decrease of 13.5 percent year-on-year, reaching €54.7 billion in the first eight months of 2025, imports from China surged by 8.3 percent to €108.8 billion. This increase in imports from China contributed significantly to its overall lead in bilateral trade with Germany.

Economists, including Carsten Brzeski, global head of macro at ING, suggest that a rebound in German exports to the US is 'unlikely in the near term' due to ongoing tariff threats and a stronger euro. The 'renewed import boom from China' has raised concerns among some analysts regarding potential 'dumping prices' and an increased dependence of Germany on the Chinese market. Surveys indicate that more than half of German firms are planning to scale back trade with the United States.