China leans less on European industry, so Germany’s trade deficit with China grows
Germany’s trade deficit with China expanded in the first half of 2026, despite the Asian powerhouse continuing to be its leading trade partner, according to preliminary data released by the state-run agency Germany Trade & Invest (GTAI) on Sunday.
German exports to China decreased by more than 12% year-on-year, totaling just under €37 billion between January and June, according to the data. This decline occurred as Chinese companies reduced their dependence on European imports, positioning China as only the ninth-largest market for German goods.
As of 2021, China ranked as the second-largest export market. That year, Germany exported goods to China valued at €104 billion, even in light of the pandemic’s impact.
Currently, German manufacturing faces challenges from U.S. tariffs and competition from China, leading to significant job reductions at key industry players like carmaker Volkswagen.
China is increasingly selling to Germany.
In the initial six months of the previous year, Germany experienced a trade deficit of €40 billion with China. That had increased to approximately €55 billion during the same period this year.
German imports from China increased by 8.9% to reach €91.8 billion during the period. Total trade was over €128 billion, which is €3 billion more than with the United States. “The reasons for declining exports to China are the weak domestic economy and increasing (Chinese) focus on domestic value chains,” stated GTAI East Asia expert Corinne Abele.
German companies are increasingly manufacturing within China, as the country’s property crisis and financially constrained regional governments are limiting investment, Abele noted.
Data from 2026 revealed that smaller economies such as Austria and Switzerland have purchased more German goods than China.
According to Commerzbank economist Vincent Stamer, China’s decreasing dependence on Germany indicates its growing independence from Western powers and its advancements in technology.
In 2025, China surpassed the U.S. to become Germany’s leading trading partner, following the return of U.S. President Donald Trump to the White House and the implementation of protectionist tariff policies that diminished German exports to the United States.
The U.S. continues to be Germany’s largest foreign market; however, exports to this region decreased by approximately 6% through June, totaling just over €74 billion, according to Abele. In contrast, German imports from the U.S. increased by 7.1% to nearly €51 billion.
France and the Netherlands were the next largest export markets. Overall, German exports increased by 3.7% to €817 billion through June, driven by sustained global growth that maintained a steady flow of orders.
However, the ‘Made in Germany’ brand must continue to reinvent itself,” stated Stamer from Commerzbank.
