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China Tops Germany's Trading Partners -- WSJ

25 Feb 2017 7:32 am
By Andrea Thomas 

BERLIN -- China upstaged the U.S. and France to become Germany's leading trading partner for the first time last year, highlighting the broad footprint of Germany's export-oriented economy -- a feature that has helped it weather external shocks in the past.

The move could be a harbinger of the shift to Asia some German politicians and business leaders have called for in case U.S. President Donald Trump delivers on his protectionist campaign pledges.

Sales generated from exports to and imports from China reached EUR169.9 billion ($179.72 billion) last year, putting the Asian giant ahead of Germany's longtime biggest trading partner France. Trade with China also overtook trade with the U.S., which was Germany's number one trade partner a year earlier, according to data released on Friday.

"The figures show that Germany is a successful export nation which is conducting close trade relations with many countries," the economics ministry said.

The fact that Germany's trade relations aren't dominated by any single region has helped it overcome economic shocks in the past. Dwindling trade with its eurozone neighbors during the region's debt crisis, for instance, was offset by exports to the U.S. and to emerging markets.

The drop in U.S. exports to Germany that underpinned the country's ranking fall in the list of Germany's main trade partners wasn't related to Mr. Trump's election, Germany's BGA export trade group said. But it could become a trend if the president made good on his threat to erect new trade barriers, causing others to do the same.

"Amid protectionist plans of the new U.S. president, it can be expected that trade relations between Germany and China will be further expanded in the future," BGA President Anton Börner said.

The German government has said it would look to strengthen trade ties with Asia should the U.S. turn its back on free trade. And in a widely noted speech at the annual World Economic Forum in Davos last month, Chinese President Xi Jinping cast himself as a defender of trade and globalization.

With its largely export-driven economy, Germany has long been a champion of lowering trade barriers around the world despite facing increasing grass roots hostility at home. Economists have warned it would be among the biggest losers if the U.S. moved to build fresh trade barriers.

Mr. Trump and some members of his administration have blamed artificially weak currencies for the U.S.'s trade deficit with China and Germany -- an argument both countries have rejected. Last month, he withdrew the U.S. from the Trans-Pacific Partnership and said he would renegotiate the North American Free Trade Agreement with Canada and Mexico.

Write to Andrea Thomas at andrea.thomas@wsj.com
 

(END) Dow Jones Newswires

February 25, 2017 02:32 ET (07:32 GMT)

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