China overtakes US as Germany's top trade partner
US has slipped from first place to third, behind France
China overtook the United States last year to become Germany’s biggest trading partner for the first time, official data showed, a shift likely to reassure Berlin as worries grow over US President Donald Trump’s protectionist leanings.
The figures compiled by the federal statistics office Destatis and seen by AFP yesterday showed that the total volume of trade between China and Germany climbed by 4 per cent to just under €170 billion (HK$1.4 trillion) in 2016.
France remained Germany’s second-largest trading partner while the US slipped to third place, as bilateral trade contracted by 5 per cent to €165 billion.
The development comes as German firms and the government brace for a protectionist backlash under Trump, who has pledged to rip up free trade deals and threatened to slap punitive tariffs on German carmakers.
Berlin has struck back at Trump’s complaints of an “unfair” trade imbalance with Germany, with Vice-Chancellor Sigmar Gabriel retorting that the US should “build better cars” if it feared German competition.
But analysts cautioned against reading too much into the latest trade rankings, pointing out the change was mainly due to strong demand for imports from China.
The US, meanwhile, remained by far the biggest buyer of German goods, with exports totalling nearly €107 billion in 2016.
Imports from the US to Germany on the other hand amounted to just €58 billion.
By contrast, Germany imported €94 billion worth of goods from China, compared to exports of €76 billion, which was a 7 per cent increase on the year before.
“As long as the title of biggest trading partner is mostly determined by imports, it doesn’t take away fears that protectionist measures under Trump could hurt the German economy,” ING-DiBa bank analyst Carsten Brzeski said.
While Gabriel has urged Germany to respond to challenges posed by Trump by building closer trade ties with other countries, particularly in Asia, Brzeski said this was easier said than done.
“If things get tougher under Trump, companies will look at external destinations but no other countries right now have the same size and purchasing power as the US,” the economist said. “It will not be that easy.”