Berlin, Germany – As Germany’s General Secretary of the Social Democratic Party (SPD), Kevin Klingbeil, โขconcluded a visit to Beijing this week, concerns are mounting in berlin over a widening trade deficit with China and vulnerabilities inโข critical supply chains.The tripโ comes amid heightened tensions sparked by Chinese export restrictions on rare earthโ elements and a โฃdispute involving Dutch-ownedโ automotive chip supplier Nexperia.
Recent data reveals a record trade deficit of 87 billion euros ($101.46 billion) with China โisโข forecastโข for this year, according to Germany Trade & Invest. China surpassed the United States as Germany’s largest trading partner in the first eight months ofโข 2025. While German exportsโ to China fell 13.5% year-on-year from January to August, imports rose 8.3%.
The shiftโ inโ 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 โขmeasures toโ offsetโ distortions and strengthen our ownโ 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 โคsome criticizing previous administrations for allowing over-dependence on China โas both a market andโ a supplier of critical materials. A parliamentary expert commission has been โappointed to rethink trade policy.
“The Nexperia example should spur โขus to talk and demand clarity – โotherwise a buisness problem gets used as a geopolitical issue,” said Volker Treier, head of foreign โคtrade at the German Chamber of commerce DIHK. Juergen Hardt, foreign policy spokesperson for Prime Minister Friedrich Merz’โs 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,โฃ believes “more decisive pain”โค is needed to “allow for the political will to make some decisive choices,” warning that “Germany is uniquely exposed โto the risks of Chinese industrial overcapacity-andโค it’s goingโฃ to hit very hard.”
