China Nears Overtaking US as Germany’s Top Trading Partner Amid Tariff Shifts

China came within striking distance of surpassing the United States as Germany's largest trading partner in the first half of 2025, preliminary data from the German statistics office reveals. The narrowing gap follows a 3.9% decline in German exports to the U.S., attributed to heightened tariffs under the TRUMP administration.

Imports from China surged 10.7% year-on-year, breaching the €80 billion threshold. Analysts interpret this as evidence of China redirecting trade flows from the U.S. to Europe, leveraging the yuan's significant undervaluation against the euro to maintain competitive pricing.

German exports to China plummeted 14.2% to €41.4 billion as local manufacturers faced intensifying competition. The resulting trade deficit ballooned to a record €40 billion, mirroring 2022 levels. Commerzbank economist Vincent Stamer notes the U.S. lead is now 'razor-thin,' with observers warning of further deterioration.