By Maria Martinez and Rene Wagner

Germany’s Trade Surplus with the U.S. Reaches Record Levels

BERLIN (Reuters) – Germany’s trade surplus with the United States reached a record level last year, according to data from the statistics office, as nations await details on how U.S. President Donald Trump will enforce tariffs on imported goods.

Record Surplus Figures

Germany’s trade surplus with the U.S. expanded to 70 billion euros ($72 billion) in 2024, significantly surpassing the previous record of 63.3 billion euros reported for the full year 2023.

Concerns Over Timing

Holger Goerg from the Kiel Institute for the World Economy (IfW) mentioned, “It would be hard to imagine worse timing.” Trump recently raised tariffs on steel and aluminum imports to 25% without exceptions. The White House has not provided comments on the German trade surplus as of now.

Retaliatory Measures

German Chancellor Olaf Scholz stated that the European Union is still awaiting official notice of any new tariffs, asserting that such measures would provoke retaliatory actions.

Potential Trade Conflict Impacts

Goerg warned that the increase in trade surpluses could be reversed if new tariffs on German imports were imposed, which Trump argues would benefit U.S. manufacturing.

Damon V. Pike, a trade specialist at BDO International, reflected on Trump’s long-standing frustration regarding Germany’s reliance on exports and the lack of domestic demand. He highlighted Trump’s plans to implement tariffs on EU imports as early as next week.

Economic Performance

Germany, Europe’s largest economy, was the only G7 nation to report a contraction for two consecutive years in 2023. A trade conflict with the U.S., its primary trading partner, could adversely affect economic output.

Export and Import Trends

In 2024, German exports to the U.S., particularly in cars and pharmaceuticals, rose by 2.2% year-on-year to a record 161.3 billion euros, reinforcing the U.S. position as the top buyer of goods marked “Made in Germany.” However, imports from the U.S. saw a decline of 3.4% to 91.4 billion euros.

Goerg posited that the U.S. trade deficit signals a lack of international competitiveness in U.S. goods, implying tariffs would not rectify the issue, and could negatively impact U.S. export performance.

Services Trade

In contrast, the trade in services presents a different scenario where the U.S. enjoys a strong export surplus, particularly with the EU and Germany. Goerg mentioned, “Mr. Trump should include that in his calculations.”

Currency Exchange

($1 = 0.9693 euros)