German exports to the United States fell sharply in July, dropping to their lowest level in over three years, as U.S. tariffs under President Donald Trump’s trade policy continue to weigh heavily on Europe’s largest economy.
According to provisional data released Monday by the Federal Statistics Office (Destatis), shipments of German goods to the United States declined by 7.9% compared to June, totaling €11.1 billion ($13 billion). This marks the fourth consecutive month of decline in exports to Germany’s largest non-European trading partner.
Despite the drop, the U.S. remained the top destination for “Made in Germany” products. However, analysts say the latest figures underscore the vulnerability of Germany’s industrial sector to geopolitical shifts and trade protectionism.
The broader export data also painted a grim picture. Germany’s total exports fell by 0.6% in July, worse than market expectations of flat growth, according to analysts polled by FactSet. Total exports stood at €130.2 billion, while imports dipped slightly by 0.1% to €115.4 billion, reducing the trade surplus to €14.7 billion.
🇨🇳 Exports to China Also Slide
Germany’s trade relationship with China, its second-largest non-EU trading partner, also took a hit. Exports to China dropped 7.3% in July, amid intensifying competition in key industries like automobiles and machinery.
German automakers and industrial giants have reported growing pressure in China, where local manufacturers are gaining market share, especially in the electric vehicle and renewable technology sectors.
Amid the bleak trade data, there was a glimmer of hope for Germany’s domestic industry. Industrial production rose by 1.3% in July, beating expectations and bouncing back from a 0.1% contraction in June.
According to Destatis, the uptick was driven by growth in the machinery, automotive, and pharmaceutical sectors.
The drop in transatlantic exports is widely seen as the direct fallout from renewed tariff measures introduced by the Trump administration earlier this year. The latest round of U.S. tariffs specifically targets European autos, machinery, and chemical products, key sectors of the German economy.
Germany’s export-reliant model has also come under stress from:
- High energy prices
- Soft global demand
- Rising competition from Asia
- Ongoing geopolitical tensions
What’s Next?
With German GDP growth projections already downgraded for 2025, policymakers and business leaders are increasingly concerned that persistent trade friction with the U.S. and China could derail efforts to stabilize the economy.
Economists are closely watching upcoming trade negotiations between the European Union and U.S. officials, hoping for a potential easing of tariffs before the end of the year.
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