China has once again overtaken the United States as Germany’s most important trading partner in 2025, according to official data released by Germany’s Federal Statistical Office (Destatis).
This marks a return to a pattern where China held the top spot continuously from 2016 to 2023, before the US briefly claimed it in 2024. In 2025, total bilateral goods trade; exports + imports between Germany and China reached €251.8 billion approximately $296.6 billion, up 2.1% from the previous year.
This edged out trade with the US, which totaled €240.5 billion, down 5.0% year-on-year. Germany’s imports from China surged to €170.6 billion (+8.8%), driven by items like data processing equipment, electrical goods, and machinery. China has been Germany’s top supplier since 2015.
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Germany’s exports to China fell to around €81.2 billion down roughly 9-10% in various reports, reflecting challenges in that direction. The drop in US trade was largely attributed to reduced German exports to the US like cars, machinery, chemicals, influenced by US tariffs under President Trump, which impacted bilateral flows.
The Netherlands ranked third with €209.1 billion in trade (+3.3%).This shift highlights Germany’s ongoing economic interdependence with China, despite earlier efforts under previous governments to “de-risk” and reduce reliance amid concerns over unfair practices, supply chain vulnerabilities, and geopolitical tensions.
It also coincides with German Chancellor Friedrich Merz planning a visit to China to discuss deepening trade ties. Earlier in 2025; first eight months, preliminary data already showed China pulling ahead, but the full-year 2025 figures confirm the overtake for the entire calendar year.
The US-China trade war, particularly its escalation in 2025 under President Trump’s second term, has had profound and multifaceted impacts on the global economy, bilateral trade flows, supply chains, and specific countries like Germany.
The trade conflict intensified early in 2025 with steep US tariffs on Chinese goods, peaking at rates as high as 145% on certain items with retaliatory Chinese tariffs reaching 125%. This led to a temporary but sharp escalation, including broad “reciprocal” tariffs and measures targeting fentanyl-related imports.
A truce was reached in October 2025 following a meeting in Busan, reducing US effective tariffs on Chinese goods to around 30-47.5% averaging ~47.5% by late 2025 and China’s retaliatory rates to ~10%, with some pauses on critical minerals and tech exports of rare earths and certain Nvidia chips.
This détente has held into early 2026, though experts view it as fragile and potentially temporary. US imports from China dropped significantly, with bilateral trade falling ~28.7% to its lowest level since 2009. The US goods trade deficit with China halved to $202 billion (a 21-year low), down from ~$418 billion previously.
Overall US goods trade deficit hit a record $1.24 trillion, as deficits shifted to other partners nearly tripling with Mexico to ~$197 billion due to supply chain rerouting and “nearshoring.” Chinese exports pivoted away from the US toward emerging markets, Southeast Asia, Latin America, Africa, and Europe, contributing to China’s record $1.2 trillion trade surplus in 2025 — driven by overproduction, weak domestic demand, and a “China Shock 2.0” flooding global markets with low-priced goods.
Redirected Chinese exports increased competition in third markets, lowering import prices but pressuring local industries; potential 0.15% drop in euro area inflation from higher Chinese inflows. Companies diversified away from China, but full reshoring to the US has been limited.
US manufacturing jobs fell; >80,000 lost in some sectors, and global trade rerouted rather than contracted massively. Tariffs acted as a tax hike ($1,000–$1,300 per US household in 2025–2026), raised US revenue ($132 billion net in 2025) but reduced long-term GDP (estimates of 0.5–0.7% drag including retaliation).
Globally, escalation risked ~0.2% merchandise trade loss, with uncertainty curbing investment. Stock market and business strain: Volatility hit markets, with firms especially midsize US ones facing tripled tariff payments and ~20% drop in outflows to China. Germany has been notably affected as a major exporter caught in the crossfire.
German goods exports to the US fell sharply ~9.4% overall, with cars/parts down ~17.8%, contributing to a ~5% drop in total bilateral trade to €240.5 billion. US tariffs including baseline ~15% on EU goods under deals made German products less competitive.
This helped China reclaim the top spot in 2025 with €251.8 billion in trade, driven by surging German imports from China as Chinese goods redirected to Europe amid US tariffs. German firms boosted investments in China to a four-year high ~€7+ billion in 2025, up 55%, hedging against US policy volatility and geopolitical risks.
Higher Chinese imports raised concerns over unfair competition and dumping, pressuring German industries. However, some benefits from lower import prices and export pivots occurred. While the 2025 escalation reduced direct US-China interdependence and achieved some US goals, it largely redistributed trade imbalances globally rather than resolving them.
The October truce provided relief, but ongoing risks — including potential renewed escalation, EU responses to Chinese inflows, and US ally strains — continue to shape 2026 outlooks. Germany’s experience illustrates how the conflict has accelerated economic reorientation toward China for some partners, despite “de-risking” rhetoric.