German trade deficit with China grows as Beijing relies less on European industry

BERLIN, Aug 9 (Reuters) - Germany's trade deficit with China widened in the first half of 2026, even as the Asian powerhouse remained its top trade ‌partner, preliminary data from state-run agency Germany Trade & Invest (GTAI) showed on Sunday.

German exports to ‌China fell over 12% year-on-year to just under €37 billion between January and June, the data showed, as Chinese firms cut ​reliance on European imports, making China only the ninth-biggest market for German goods.

As recently as 2021, China was the second-biggest export market. That year, Germany sold China merchandise worth €104 billion, despite the effects of the pandemic.

Now, German manufacturing is struggling with both U.S. tariffs and Chinese competition, triggering major job ‌cuts at bulwarks of industry ⁠such as carmaker Volkswagen.

In the first half of last year, Germany ran a trade deficit of €40 billion ⁠with China. That had swelled to some €55 billion during the same period this year.

German imports from China rose 8.9% to €91.8 billion over the period. Total trade was over €128 billion, €3 billion more than with the United ​States.

"The ​reasons for declining exports to China are the weak ​domestic economy and increasing (Chinese) focus on ‌domestic value chains," said GTAI East Asia expert Corinne Abele.

German firms are now producing more inside China itself, while China's property crisis and cash-strapped regional governments are curbing investment, Abele added.