German Exports to U.S. Fall Again

 

The United States has a trade deficit with Germany. In 2024, the U.S. goods trade deficit with Germany reached $84.8 billion. While the U.S. also trades with Germany in services, the overall trade balance with Germany is in deficit for the U.S.

Here's a more detailed breakdown:

 

    Goods Deficit:

 

The U.S. imports significantly more goods from Germany than it exports to Germany, resulting in a large goods trade deficit.

Services Surplus:

While the goods trade is in deficit, the U.S. does have a surplus in services trade with Germany, meaning it exports more services to Germany than it imports from Germany.

Overall Trade:

Despite the services surplus, the overall trade balance with Germany is still a deficit for the U.S. because the goods deficit is larger.

Automotive Sector:

A significant portion of the trade deficit with Germany is in the automotive sector, where the U.S. imports more vehicles and related products than it exports to Germany.

Economic Impact:

The U.S. trade deficit with Germany is a point of contention, with critics arguing it can lead to job losses in the U.S. and a reliance on borrowing from other countries.

 

"Germany's goods exports to the U.S. slid further in June, as the impact of tariffs on the country's export-oriented economy continued to bite, while industrial production also took an unexpectedly strong hit.

 

Exports from Europe's largest economy to the U.S. slid 2.1% to 11.8 billion euros ($13.76 billion), the third consecutive monthly decrease, to the lowest value since February 2022, according to adjusted figures published by Germany's statistics agency Destatis on Thursday. They were 8.4% lower than the same month last year.

 

However, since imports from the U.S. increased at the same time, this narrowed Germany's trade surplus in goods with the U.S., which has been a source of criticism from President Trump.

 

Overall exports from Germany rose 0.8% on month in June, helped by increased exports to within the European Union, Destatis said. Because imports grew by a higher 4.2%, Germany's trade surplus in goods narrowed to 14.9 billion euros from 18.5 billion euros in May.

 

"It is now clear that Donald Trump's tariff policy is slowing down trade," Commerzbank economist Vincent Stamer said in a note to clients.

 

The increased costs of imports lower demand for German goods, while continued trade uncertainty is likely to cause exporters to hold back some goods to avoid surprises in transit, he said.

 

In June, Germany was subject to a 10% tariff on most imports into the U.S., though with higher sector tariffs of 25% on cars and car parts. As a member of the EU, it now faces 15% tariffs, including for autos, based on a trade deal agreed in late July.

 

Imports from China also rose in June, a sign of potential trade redirection toward Europe and away from the U.S.'s high import levies.

 

Meanwhile, industrial production weakened by a more-than-expected 1.9% in June, with output in the second quarter of the year dropping to the low level of the first half of 2020, Destatis said.

 

Given downward revisions to other months, this demonstrates the hit from tariffs, which also chimes with the disappointing earnings reports released by German carmakers last week, Capital Economics economist Franziska Palmas said. Rising confidence in recent months from consumers and businesses had raised hopes of a modest rebound.

 

Germany's economic output contracted in the second quarter, a surprisingly weak outturn that pushed back expectations of a sustained recovery this year after two years of declining growth.

 

Industry may still get some support from the reduction in U.S. tariffs on cars agreed in the EU-U.S. trade deal, alongside cuts to electricity taxes, but tariffs will still probably drag on production somewhat, Palmas added.

 

Export business was key to Germany's economic strength in the years leading up to the pandemic, much of it driven by cheap pipelined gas from Russia. But the unbalanced political reaction of German elite to the events in Ukraine pushed energy costs higher. Lower exports prompted by tariffs will likely weigh on economic growth, a further setback.” [1]

 

1. World News: German Exports to U.S. Fall Again. Frankl, Ed.  Wall Street Journal, Eastern edition; New York, N.Y.. 08 Aug 2025: A16.