Derisking from US, the only way ahead for Germany

Trans-Atlantic Era is coming to an end. America is teetering in her stead. With a high-debt & high-consumption economy her place in geoeconomics is getting eroded faster than expected. That has put Germany in a strategy dilemma. De-risk or Do-nothing is the critical question faced by German ruling coalition. Here is my take:

C.P. Scott famous British Journalist once said “Facts are sacred, opinion is free”. Taking cue from him let me give you the facts first and air my opinion later. Here are the facts in a nutshell:

1. Germany is EU’s largest exporter to US with a big slice of 34% of the total exports volume. Despite the oversized role, Germany has neither been spared by Trump as regards to tariff war nor does she enjoy any privileged position in importing high-precision technology from America. Instead this alienated her from the rest of the EU members who often complain that they get step-motherly treatment from Germany as regards to terms of trade.

2. According to custom figures about 9.4% reduction in total volume of exports to US was registered in 2025 even though the total value is till much higher at € 136 Billion. Correspondingly, Germany’s imports from US marked a slight reduction at 2% only, indicating that Germany is unable to reduce imports level as she depends more on America for techno items.

3. Let us turn to the macro picture of € 1.56 Trillion exports in 2025 and how it is distributed:

3.1 China accounts for 5.95% of the export 

3.2 America imports 11% of German manufacture

3.3. The rest of the world covers 37.25% of German Exports

3.4. Ten EU members are responsible for the highest portion of the German exports at 45.3%. The biggies are France, Netherlands & Poland taking in 20.7% a big chunk indeed. Italy and Austria together bags little more than 10%

3.5 It illustrates that mainstay of the German exports is continental Europe rather than towards overseas.

4. A pertinent point is even the drop of 9.4% reduction in total volume of exports to US was compensated by rising continental purchases proving that Germany is safe within European Community rather than in the sphere of Trans-Atlantic trade.

My Opinion

Firstly, EU must be developed as a self–containing economic group because she can sustain German export drive within the continent.

Secondly, trade relationship with China must be expanded and the latest visit by Chancellor Friedrich Merz to China with intention to re-set German-China relationship is a step in the right direction. Expectedly, Xi Jinping, Chairman of China was on record stating that the two countries should be “reliable partners that support each ⁠other”.

Thirdly, Germany must concentrate on the Global South which is the second largest destination for German exports.

Fourthly, De-risking from America should begin in earnest straight away.

All these four measures are part and parcel of “navigating strategy amid geoeconomics”. For the time being, Germany should concentrate on trade expansion!

 

Cheers!

 

Muthu Ashraff Rajulu

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser