Germany’s Trade Deficit with China Nears Record High as Exports Decline

Germany's trade imbalance with China is poised to hit an unprecedented €87 billion this year, according to forecasts from Germany Trade and Invest. Chinese imports to Germany are projected to surge 7.2% to €168 billion, while German exports to China face a 10% drop to €81 billion. The automotive sector, once Germany's crown jewel, is bearing the brunt of this shift.

Holger Goerg of the Kiel Institute highlights fading competitiveness as the Core issue. German car exports globally are expected to fall 3.2% in 2025, with electric vehicles facing particularly intense pressure from Chinese manufacturers. Deutsche Bank data shows a 5% year-on-year decline in German auto exports to China through July 2025.

The trend extends beyond trade flows. Volkswagen and other German automakers are increasingly shifting production to China under the "in China, for China" strategy. This realignment reflects deeper structural challenges in Germany's industrial economy as it struggles to maintain its edge in key export markets.