Germany’s China Trade Deficit May Top €100 Billion This Year
An IW report says imports were nearly 2.5 times exports in the first half, with autos, electrical goods and machinery under pressure.
Key takeaways
- Germany imported nearly 2.5 times what it exported to China in the first half of 2026.
- The annual trade deficit could exceed €100 billion if the trend continues.
- The IW report says automotive trade with China has shifted sharply against Germany.
- IW expert Jürgen Matthes called for rapid compensatory tariffs.
Germany imported nearly 2.5 times as much from China as it exported in the first half of 2026, according to a report by the German Economic Institute (IW). The report says the annual trade deficit could exceed €100 billion if the trend continues.
The automotive industry has been hit hardest, the report says. Germany’s trade with China in the sector showed a surplus of more than €23 billion in 2019, but that gain has since disappeared. Automotive exports to China fell 50% from 2019, while imports of Chinese vehicles and parts rose more than 475%.
The report also points to widening gaps in electrical goods and machinery. The deficit in batteries and motors has increased fivefold since 2019 to more than €24 billion, while the shortfall in computers and data equipment reached €38 billion.
Machinery trade is expected to shift from a €10 billion surplus in 2019 to a €1 billion deficit this year, a net deterioration of €11 billion, according to the report. Energy-intensive sectors such as chemicals, paper, glass and metals account for only €4 billion of the overall deficit, it says.
IW expert Jürgen Matthes said China’s technological progress, state subsidies and exchange-rate policy were behind the shift. He called for domestic reforms and rapidly implemented compensatory tariffs, saying the European Commission should develop a new trade instrument.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
