China overtakes US and France as Germany’s biggest trading partner

A staff member cleaning the bonnet of a BMW 118i car during the Imported Auto Expo in Beijing, China.

China for the first time became Germany’s most important trading partner in 2016, overtaking the US, which fell back to third place behind France, data showed last Friday.

German imports from and exports to China rose to €170 billion last year, Federal Statistics Office figures reviewed by Reuters showed.

The development is likely to be welcomed by the German government, which has made it a goal to safeguard global free trade after US President Donald Trump threatened to impose tariffs on imports and his top adviser on trade accused Germany of exploiting a weak euro to boost exports.

German Vice Chancellor Sigmar Gabriel has even suggested that the EU should refocus its economic policy toward Asia, should the Trump administration pursue protectionism.

“Given the protectionist plans of the new US President one would expect that the trade ties between Germany and China will be further strengthened,” Germany’s BGA trade association said in response to the shift.

Neighouring France remained the second most important business partner with a combined trade volume of €167 billion. The US came in third with €165 billion.

The US came in third with €165 billion

In 2015, the US became the top trading partner for Germany, overtaking France for the first time since 1961 thanks to an upturn in the US economy and a weaker euro.

Separately, Germany’s Committee on Eastern European Economic Relations said it expected exports to Russia will probably rise at least five per cent this year, their first increase in years given Western sanctions.

Looking at exports alone, the US remained the biggest client for products ‘Made in Germany’ in 2016, importing goods from Europe’s biggest economy worth some €107 billion.

France remained the second-most important single export destination for German goods with a sum of €101 billion, the data showed. Britain came in third, importing German goods worth €86 billion.

Britain accounted also for the biggest bilateral trade surplus: exports surpassed imports from Britain by more than €50 billion, the figures showed.

The US came in second with a bi-lateral trade deficit: German exports to the US surpassed imports from there by €49 billion.

This means that Britain and the US together accounted for roughly 40 per cent of Germany’s record trade surplus of €252.9 billion in 2016.

The figures are likely to fuel the debate about Germany’s export performance, its trade surplus and global economic imbalances ahead of a meeting of G20 finance ministers and Central Bank governors in Baden-Baden mid-March.

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