Germany's two largest markets are turning their backs on the nation. Exporters warn that neither the US nor China will offer a recovery in 2026, as tariffs, a strong euro, and Chinese self-sufficiency strangle the prospects of the German economy, leaving Chancellor Friedrich Merz in a state of despair.
Warning of prolonged weakness
German exporters must prepare for continued weakness in 2026 across their two largest markets, the United States and China, with no substantial prospects for recovery. This was stated on Friday by the BGA trade association. "We do not see a turnaround in the situation, but at best a short breather," said BGA President Dirk Jandura, according to Reuters.
Drop in exports to US and China
According to data from GTAI, exports to the US are estimated to have decreased by more than 7% in 2025, falling to just under 150 billion euros. The decline was even more pronounced regarding China, where exports shrank by 10%, down to 81 billion euros.
Tariffs blocking transatlantic trade
American tariffs on European products are acting like "sand in the gears of transatlantic trade," Jandura emphasized, adding that they create a permanent additional burden on the profit margins of German exporters. At the same time, Germany faces structural challenges, such as a comparatively strong euro, high energy costs, excessive bureaucracy, and weak investment.
China's pivot reduces German exports
In China, industrial policies favoring domestic producers have eroded demand for German products, particularly in the automotive, engineering, and chemical sectors, where Chinese competitors are gaining ground. Jandura noted that German companies are increasingly relocating their production within China or directing investments toward other Asian markets. "This often stabilizes global sales, but it leads to fewer exports from Germany," he concluded.
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