German exports to the US fell by 7.8% in the first three quarters of this year compared to the same period last year, according to a survey by the German Economic Institute (IW). This is a rather sharp setback from the average annual growth of almost 5% recorded between 2016 and 2024.
The trade deficit with China also reached a record €90 billion.
The report, led by Samina Sultan, a senior economist at IW, concludes that Germany can no longer rely on export markets that have been “traditional” for it, notes Euronews. The authors call on German authorities to urgently diversify markets and integrate more deeply into Europe.
The study emphasizes that exports of automobiles and spare parts, machinery and chemical products were particularly hard hit. These three sectors alone combined to reduce German exports to the U.S. by more than 5.2 percentage points year-on-year, accounting for more than two-thirds of the total decline.
Shipments of automobiles to the U.S. fell by 14% and machinery by 9.5% as duties of up to 50% were imposed on steel, aluminum and related products.
The report warns that U.S. import tariffs are unlikely to return to previous levels anytime soon, and export performance in the third quarter of 2025 is likely to reflect a “new normal” for Germany’s trade with the United States.
At the same time, while the drop in German exports to the United States is directly related to trade policy, the decline in exports to China reflects deeper, structural changes in the global economy and in China’s own industrial capacity, IW experts warn. And they urge to take these changed realities into account.
Germany should invest more in expanding alternative markets for its products, while removing remaining barriers within the EU single market and accelerating the conclusion of free trade agreements with third countries, according to the authors of the study.
