German exporters face prolonged slump in key U.S., China markets

BERLIN, Jan 2 (Reuters) – German exporters should prepare for continued weakness in 2026 in their two ​largest markets, the United States and China, with ‌little prospect of recovery, the BGA trade association said on Friday.

“We ‌do not see a turnaround, but at best a brief respite,” said BGA president Dirk Jandura.

Exports to the U.S. are projected to have fallen more than 7% to ⁠just under 150 ‌billion euros ($156 billion) in 2025, while exports to China have contracted even more sharply, ‍dropping 10% to 81 billion euros, GTAI figures show.

TARIFFS WEIGH ON TRANSATLANTIC TRADE

U.S. tariffs on EU goods have acted like “sand in ​the gears of transatlantic trade”, Jandura said, adding ‌they created a permanent additional burden on margins for German exporters.

Germany also faces structural headwinds, including a comparatively strong euro, high energy costs, excessive bureaucracy and weak investment, the BGA chief said.

CHINA PIVOT REDUCES GERMAN EXPORTS

In ⁠China, industrial policies favouring domestic ​producers have eroded demand for German ​goods, particularly in automotive, mechanical engineering and chemicals sectors where Chinese competitors are gaining ground.

German ‍companies are ⁠increasingly localizing production within China or shifting investment to other Asian markets, Jandura said.

“This often stabilizes global ⁠sales, but leads to fewer exports from Germany,” he said.

($1 = 0.9615 ‌euros)

(Reporting by Rene Wagner, writing by Maria ‌Martinez, Editing by Madeline Chambers)