The Trade Gap Between Germany and China Is Widening
According to a report by the German Economic Institute (IW), in the first half of 2026, Germany’s imports from China were worth approximately 2.5 times as much as its exports to China.
The gap between Germany’s imports from and exports to China is widening. According to a report by the German Economic Institute (IW), in the first half of 2026, Germany imported goods from China worth approximately 2.5 times the value of its exports to the country. If this trend continues, the annual trade deficit could exceed €100 billion.
One of the most significant changes is taking place in the automotive sector. Germany’s car exports to China have fallen by 50% compared with 2019. Over the same period, imports of vehicles and spare parts from China have increased by more than 475%.
Conditions are also worsening in the machinery and electrical industries. In 2019, Germany recorded a €10 billion surplus in machinery trade with China. This year, however, imports are expected to exceed exports by €1 billion.
The report notes that high energy costs alone cannot explain the problem. Energy-intensive industries such as chemicals, paper, glass, and metals account for just €4 billion of the overall trade deficit. The impact of competition with China is being felt more strongly in Germany’s core manufacturing sectors.
IW expert Jürgen Matthes says Germany must take urgent action. Alongside domestic reforms, he proposes additional customs duties to counter the effects of unfair competition. In his view, the aim is to create a level playing field for companies rather than close the market to competition.