German exporters face prolonged slump in key U.S., China markets

Core Viewpoint - German exporters are expected to face continued weakness in their two largest markets, the United States and China, with little prospect for recovery in 2026 [1] Group 1: Export Projections - Exports to the U.S. are projected to decline by more than 7% to just under 150 billion euros ($156 billion) in 2025 [2] - Exports to China are expected to contract by 10% to 81 billion euros [2] Group 2: Trade Barriers and Structural Challenges - U.S. tariffs on EU goods have created a significant burden on margins for German exporters, acting as "sand in the gears of transatlantic trade" [3] - Germany faces structural challenges such as a strong euro, high energy costs, excessive bureaucracy, and weak investment [3] Group 3: Impact of China's Industrial Policies - China's industrial policies favoring domestic producers have reduced demand for German goods, particularly in the automotive, mechanical engineering, and chemicals sectors [4] - German companies are increasingly localizing production within China or shifting investments to other Asian markets, which stabilizes global sales but results in fewer exports from Germany [4]