After years of China being Germany's top trading partner, the U.S. is now quietly overtaking it. In the first quarter of 2024, Germany's trade with the U.S. totaled 63 billion euros ($68 billion), while trade with China fell just below 60 billion euros.
Carsten Brzeski, global head of macro research at ING Research, attributes this change to several factors. The U.S. economy is strong, which has increased demand for German goods. Meanwhile, China's demand has slowed, and it now produces many products that it used to import from Germany, particularly cars.
China had been Germany's leading trade partner for many years, but the gap between China and the U.S. has narrowed recently. Holger Schmieding, chief economist at Berenberg Bank, noted that the U.S. has always been a larger market for German exports than China. While U.S. demand for German products has grown, demand from China has declined due to a slowing economy and competition from government-backed Chinese companies.
The U.S. is also increasingly significant for German imports. Germany is actively reducing reliance on China and encouraging businesses to "de-risk." Although Germany still views China as an important partner, tensions over trade practices and tariffs have increased, particularly between China and the European Union. A recent survey from the German economic institute Ifo showed that the percentage of companies relying on China dropped from 46% in February 2022 to 37% in February 2024.
Brzeski emphasized that the rising importance of the U.S. as Germany's leading trading partner reflects changing global trade patterns and a gradual shift away from China.
Key Points
Trade Shift: In the first quarter of 2024, the U.S. became Germany's largest trading partner, reaching 63 billion euros in total trade, surpassing China at just under 60 billion euros.
Factors Influencing Change: The U.S. economy's growth has boosted demand for German goods, while China's slowing economy and increased domestic production have reduced its need for German imports.
Reduced Reliance on China: Germany has encouraged businesses to "de-risk" from China, contributing to a significant decrease in German companies reliant on Chinese inputs from 46% in 2022 to 37% in 2024.
FAQs
Q1. Who are Germany's top 3 trading partners?
Germany's top three trading partners are the United States, China, and the Netherlands. The U.S. recently became Germany's biggest partner, surpassing China, while the Netherlands remains a major European trading ally.
Q2. Who is the biggest trade partner of the US?
China is the biggest trading partner of the U.S. Their trade relationship involves significant imports and exports, making them major economic partners despite occasional trade tensions.
Q3. Who is Germany's biggest trading partner?
Currently, the United States is Germany's biggest trading partner. The U.S. has surpassed China due to strong economic growth and increased demand for German goods.
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