Berlin, Germany – As Germany’s General Secretary of the Social Democratic Party (SPD), Kevin Klingbeil, concluded a visit to Beijing this week, concerns are mounting in berlin over a widening trade deficit with China and vulnerabilities in critical supply chains.The trip comes amid heightened tensions sparked by Chinese export restrictions on rare earth elements and a dispute involving Dutch-owned automotive chip supplier Nexperia.
Recent data reveals a record trade deficit of 87 billion euros ($101.46 billion) with China is forecast for this year, according to Germany Trade & Invest. China surpassed the United States as Germany’s largest trading partner in the first eight months of 2025. While German exports to China fell 13.5% year-on-year from January to August, imports rose 8.3%.
The shift in trade dynamics is partially attributed to former U.S. President Trump’s tariffs, which have prompted Chinese companies to divert exports to Europe. “Industries are sounding the alarm on competition with China – we need quick measures to offset distortions and strengthen our own competitiveness,” said Ferdinand Schaff, senior manager for greater China at the BDI industry association.
Politicians in Germany are reassessing the country’s relationship with Beijing, with some criticizing previous administrations for allowing over-dependence on China as both a market and a supplier of critical materials. A parliamentary expert commission has been appointed to rethink trade policy.
“The Nexperia example should spur us to talk and demand clarity – otherwise a buisness problem gets used as a geopolitical issue,” said Volker Treier, head of foreign trade at the German Chamber of commerce DIHK. Juergen Hardt, foreign policy spokesperson for Prime Minister Friedrich Merz’s CDU party, stated, “It must be clear to the Chinese government that we cannot accept economic and political interests being mixed together.”
jacob Gunter, head of the economy and industry program at the think tank Merics, believes “more decisive pain” is needed to “allow for the political will to make some decisive choices,” warning that “Germany is uniquely exposed to the risks of Chinese industrial overcapacity-and it’s going to hit very hard.”
