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February 25, 2017

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Home » Business » Economy

China is Germany’s top trade partner

Source: AFP | February 25, 2017, Saturday | Print Edition

CHINA overtook the United States last year to become Germany’s biggest trading partner for the first time, official data showed yesterday, a shift likely to reassure Berlin as worries grow over US President Donald Trump’s protectionist leanings.

The figures compiled by federal statistics office Destatis showed the total volume of trade between China and Germany climbed 4 percent to just under 170 billion euros (US$180 billion) in 2016.

France remained Germany’s second-largest trading partner with a combined trade volume of 167 billion euros. The US fell from first to third place as bilateral trade lost 5 percent to 165 billion euros.

The development comes as German firms and the government brace for a protectionist backlash under Trump, who has vowed to tear free trade deals and threatened punitive tariffs on German carmakers.

Berlin has struck back at Trump’s complaints of an “unfair” trade imbalance with Germany, with Vice Chancellor Sigmar Gabriel memorably retorting that the US should “build better cars” if it feared German competition.

But analysts cautioned against reading too much into the latest trade rankings, pointing out that the change was mainly down to strong demand for imports from China.

The US meanwhile remained by far the biggest buyer of German goods, with exports totaling nearly 107 billion euros in 2016.

Imports from the United States to Germany came to just 58 billion euros. By contrast, Germany imported 94 billion euros worth of goods from China, compared with exports of 76 billion euros.

“As long as the title of biggest trading partner is mostly determined by imports, it doesn’t take away fears that protectionist measures under Trump could hurt the German economy,” analyst Carsten Brzeski at ING-Diba bank said.

While Gabriel has urged Germany to respond to the challenges posed by Trump by building closer trade ties with other countries, particularly in Asia, Brzeski said this “will not be easy” because “no other countries right now have the same size and purchasing power as the US.”

Economy


 

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