The United States is no longer Germany’s biggest trading partner. China just took back that title, and the reason is pretty straightforward: tariffs.
According to preliminary data from Germany’s statistics office, total trade between Germany and China reached €163.4 billion ($190.7 billion) from January through August 2025.
That edged out U.S.-Germany trade, which came in slightly lower at €162.8 billion.
Trump’s Tariffs Are Driving the Shift
This change comes after U.S. President Donald Trump imposed a wide range of new tariffs earlier this year, including a blanket 10% hike on all imports (with some carveouts), plus targeted increases against countries like China, South Korea, and even U.S. allies like Jordan and Israel.
“There is no question that U.S. tariff and trade policy is an important reason for the decline in sales,” said Dirk Jandura, president of Germany’s BGA foreign trade association.
The tariffs have already taken a toll. German exports to the U.S. dropped 7.4% in the first eight months of 2025 compared to the same period last year.
The trend accelerated in August, with exports to the U.S. plunging 23.5% year over year.
Investors Aren’t Loving It Either
While tariffs are typically expected to boost the dollar, this time the opposite happened.
After Trump’s April 2 announcement, which he called “Liberation Day”, the dollar actually lost about 5% of its value against major currencies.
According to a new study from the Peterson Institute for International Economics (PIIE), this drop reflects investors demanding a higher risk premium for holding U.S. assets.
That shift could result in more long-term damage.
PIIE’s economic models show that under worst-case scenarios, the U.S. could see real GDP fall 2.1% by 2026, while durable goods manufacturing might shrink nearly 12%.
Agriculture is also expected to suffer, with a projected 10% drop in output by 2034.
Germany Still Has Issues With China
Even though China reclaimed the top spot, trade between Germany and China isn’t all good news.
German exports to China actually fell 13.5% in the same eight-month stretch. What boosted China’s trade numbers was an 8.3% surge in Chinese imports into Germany.
“The renewed import boom from China is worrying,” said Carsten Brzeski, global head of macro at ING, noting that some of these goods are being sold at “dumping prices.”
That has raised fresh concerns in Germany about over-reliance on China, especially as Chinese industries ramp up competition in sectors like electric vehicles and machinery.
Big Promises, Bigger Consequences
Trump had predicted his tariffs would make America “wealthy again,” but early data suggests they may be doing the opposite.
The PIIE study found that manufacturing and agriculture, two sectors Trump promised to protect, are among the hardest hit.
With foreign demand slipping, inflation ticking up, and investment uncertainty growing, the tariffs are starting to reshape global trade dynamics.
For Germany, the outcome is straightforward: the U.S. is buying less, and China is filling in the gap, for now.