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)