Expectation of Record Deficit in Trade Between Germany and China
A report by the German Economic Institute shows that a record deficit is projected in Germany's trade with China, with the automotive and electrical sectors taking a major hit.
According to a recent analysis report published by the German Economic Institute, a record deficit is expected in Germany's trade balance with China. While strategic sectors, particularly the automotive and electrical industries, are taking a major hit, it is stated that the annual deficit could exceed 100 billion euros.
New Analysis Report Published
A new analysis report titled Record Trade Balance Deficit with China, addressing commercial relations and key sectors between the two countries, was published by the German Economic Institute.
The report demonstrated with concrete data and detailed evaluations how the balance of competition in global markets has shifted to the detriment of German industry.
Massive Increase in Trade Deficit
In the first half of 2026, Germany imported nearly 2.5 times what it exported to China, and this trend is expected to continue.
It was stated that if the current trend continues, the annual trade deficit will exceed 100 billion euros, representing more than a sevenfold increase since 2019.
Major Loss in the Automotive Sector
The automotive industry, the locomotive of German industry, was recorded as the sector taking the heaviest blow against China.
Germany, which had a surplus of over 23 billion euros in its trade with China in 2019, has completely lost this gain.
Export and Import Balance
Automotive exports to China decreased by 50 percent compared to 2019, while imports of vehicles and spare parts originating from China recorded a record increase of over 475 percent.
It was reported that heavy losses were experienced not only in the automotive field, but also in other key areas such as the electrical industry and machinery manufacturing.
Expert Warnings and Solution Proposals
IW expert Jürgen Matthes warned that the second China shock directly hit the industry's production hub.
Matthes emphasized that in addition to internal reforms, compensating customs tariffs that can be implemented rapidly are urgently needed.