As a result of the customs dispute
Chinese goods are flooding the German market
According to a recent study, Germany is increasingly becoming an alternative market for Chinese companies. As a result of the trade dispute with the USA, large numbers of cheap goods are being diverted.
According to a study, because of the tariff conflict with the USA, China has redirected large quantities of goods to Germany in order to sell them comparatively cheaply here. The German market has been “flooded,” according to a study by the German Economic Institute (IW) in Cologne sponsored by the Foreign Office. In the first half of 2025, Chinese imports to Germany increased by eleven percent and the price fell by almost four percent.
At the same time, Chinese exports to the USA fell by almost 16 percent. Overall, according to the information, in 1,558 product groups in which US imports from China declined, German imports of goods from there grew in volume by at least ten percent in the second quarter compared to the same period last year.
Abnormalities in the automotive sector and the chemical industry
According to the IW study, imports from China of hybrid electric cars (plug-ins) increased particularly strongly: the value of cars more than doubled in the second quarter (plus 131 percent), while exports of this product group from the Asian country to the USA almost came to a standstill (minus 99 percent).
Car parts would also increasingly end up in Germany. The import value of manual transmissions almost doubled, while it fell by a good five percent in the USA. According to the IW, there were also noticeable increases in the chemical industry. German imports of polyamides increased by 100 percent, while in the USA they fell by almost eleven percent.
China pays significantly more tariffs for exports to the USA than before, meaning that products can no longer be sold there as cheaply as they were at the beginning of the year. The study makes it clear that many Asian exporters have switched gears because of the headwind from the USA and increased their European business – in doing so they are relying on low prices, which is putting pressure on the domestic economy.
Demand for EU action – Klingbeil in China
“Because the USA is isolating itself more from China, Germany is increasingly becoming an alternative market for Chinese companies,” said IW expert Jürgen Matthes. As a result, key German industries such as the already struggling automotive sector came under pressure. Because the Chinese state generously supports its economy and the Chinese currency, the yuan, is undervalued, the local industry benefits from unfair distortions of competition.
You can offer your goods at extremely low prices. “Brussels must therefore rely more heavily and comprehensively on countervailing duties in order to enable fair competition conditions again,” demanded the IW expert.
The federal government is now insisting on concessions in trade policy in China. “We are not afraid of competition,” said Finance Minister Lars Klingbeil today at the German-Chinese financial dialogue in Beijing. But fair competition is needed. “Every partnership requires reliable cooperation.” Together with high-ranking managers from banks and insurance companies, Klingbeil wants to achieve better market access in the People’s Republic on his trip to China.
