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European auto trade balance and investment shifts

Updated 11 times since CLSTR started tracking revisions of this situation.

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2026-09-13 16:35 UTC → 2026-09-14 15:28 UTC · added ~~removed~~

The trade imbalance between Germany and China continues to widen. While Chinese exports to Germany surged by 17.4% in July 2026 to $12.3 billion, German imports to China fell 2.7% to $7.9 billion. For the first seven months of 2026, China maintained a cumulative surplus of nearly $27 billion against Germany. Data from the first half of 2026 highlights a significant shift: German exports to China dropped by more than 12% to approximately €37 billion, causing China to fall to ninth among Germany's top importers. In contrast, German imports from China rose by nearly 9% to almost €92 billion, expanding Germany's trade deficit with China to roughly €55 billion. Recent developments indicate that China is aggressively expanding its presence in key global industries, a trend that is reportedly causing the German automotive industry to concede ground. Observers suggest that Europe and Germany currently appear unable to counter this shift. Furthermore, German companies significantly increased their investments in China during the first half of 2026, reaching approximately €5.6 billion—a one-third increase compared to the same period last year. Experts note a shift toward using local profits for these investments, with the German Institute of Economic Research (IW) describing China as a ‘fitness center’ where companies test themselves against intense local competition. Conversely, German investment in the United States saw a sharp decline of nearly two-thirds to approximately €4.3 billion, a retreat attributed to US economic policies and high tariffs. IW expert Jürgen Matthes noted that state subsidies in China and an undervalued yuan create an environment of artificially low production costs, which may lead to a shift of production and jobs from Germany to China. Matthes has urged the European Union to implement countervailing tariffs to address these competitive imbalances.

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