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USA close to overtaking China as Germany’s top trading partner

Data from Germany’s Federal Statistics Office has shown that China remained Germany’s most important trading partner in 2023. However, goods traffic fell significantly, while trade with the USA increased. According to Germany Trade and Invest (GTAI), there are many reasons why the USA may even replace China as the most important trading partner in 2024.

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According to the Federal Statistical Office (Destatis), Germany’s trade with China was worth €253.1 billion in 2023, making China Germany’s most important trading partner for the eighth year in a row.

It is now closely followed by the USA, with whom the trade value last year totalled €252.3 billion. The Netherlands also made it into the top 5 on €214.8 billion, followed by France (€185.6 billion) and Poland (€169.7 billion).

China’s lead is narrowing

Trade with China developed worse in 2023 than in the previous year. The value of goods imported from the country fell by 19.2% to €155.7 billion euros compared to 2022.

Nevertheless, China was able to confirm itself as Germany’s most important supplier country. The value of goods exported to China fell by 8.8% to €97.3 billion. The trade deficit reached €58.4 billion, making it the second largest trade deficit with China since records began in 1950.

According to GTAI, the declining figures in bilateral trade are due to a variety of political and economic aspects, but above all the company points out that the strategy of German companies with regard to the Chinese market has changed and has recently focused more on localisation.

USA in the fast lane

Trade with the USA increased in 2023.Above all, the country’s importance as an export destination for German goods has been growing continuously since 2015. In 2023, goods worth 157.9 billion euros were exported to the United States, an increase of 1.1 percent compared to the previous year. Imports from the USA reached a value of 94.4 billion euros, which was also 1.1percent more than the year before. The export surplus was 63.5 billion euros (2022: 62.9 billion euros).

At the beginning of the year, the GTAI made cautious forecasts that if the good performance in bilateral trade continues, the USA could replace China as Germany’s most important trading partner in 2024, although a lot depends on thisThe outcome of the presidential election and the resulting trade policy.

Poland remains Germany’s 5th most important trading partner

Poland was able to assert itself as Germany’s fifth most important trading partner in 2023.

Trade turnover between the two countries reached €169.7 billion, a slight decrease compared to the previous year. The value of goods exports fell by 3.8% to €89.2 billion. At the same time, imports from Poland rose by 2.5% to €80.4 billion.

According to Lars Gutheil, Managing Board Member of the German-Polish Chamber of Commerce and Industry (AHK Poland) in Warsaw, the slightly weakening trade volume is due to the economic downturn, especially in Germany. Since Poland remains popular as a nearshoring destination among German medium-sized businesses, an increase in production for the German market is possible in the future, which could boost trading sales again.

Russia is losing importance

German-Russian trade relations remained subdued in 2023. Trade fell by 75% in 2023 to €12.6 billion euros.

Exports of goods to Russia fell by 38.8 percent to €8.9 billion compared to 2022. The number of imported goods also shrank by 90% to €3.7 billion (in 2022 it was €36.4 billion). Until the second half of 2022, Russia remained an important energy supplier for Germany, but has since slipped from 14th place to 46th.

The United Kingdom benefits from the special effect

The UK made it back into the top 10 of Germany’s trading partners in 2023, taking ninth place with a trade turnover of €115.1 billion.

Commented on the situation, the GTAI said that German-British trade had bottomed out, but warned against premature enthusiasm, as the strong performance was primarily due to a special automotive effect that distorts the overall picture. The GTAI estimates, citing data from Destatis, that German car exports to the UK increased by 26.4%. Without including car imports, the exchange of goods shrank by 4.3%.

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