Germany has been criticized for years for its high export surplus. In May, German exports surprisingly fall, leaving the trade balance negative for the first time in at least 14 years. Again, the problem lies with the supply chains.
For the first time in years, Germany’s foreign trade balance was negative in May – the value of exports was lower than the value of imports. Exports shrank by 0.5 percent compared to April, imports increased by 2.7 percent, as reported by the Federal Statistical Office. The DIHK expert Volker Treier warned: “The export downturn has begun.”
It is the first time since January 2008 that Germany’s foreign trade balance has been negative; According to the statistics, the minus was one billion euros. The Federal Statistical Office does not have any comparative figures from the years before 2008 because the statistics were changed at that time. For years, Germany was criticized for its high export surplus.
The value of exports reached around 125.8 billion euros. According to statistics, companies in Germany exported goods worth 67.5 billion euros to the EU member states in May, a decrease of 2.8 percent compared to April. Exports to third countries, on the other hand, increased: compared to April, they grew by 2.3 percent to 58.3 billion euros. Most German exports went to the USA – the value rose by 5.7 percent compared to April to 13.4 billion euros. Exports to China increased by 0.5 percent to 8.7 billion euros.
Most of the imports worth 18.0 billion euros came from the People’s Republic in May – but that was 1.6 percent less than in April. Goods worth 7.4 billion euros were delivered to Germany from the USA, an increase of 9.7 percent. The total value of the imports was around 126.7 billion euros.
“Exporters are less and less able to pass on the supply chain-related cost increases to international customers,” explained Treier, head of foreign trade at the Association of German Chambers of Industry and Commerce (DIHK). In addition, important imported goods for the necessary further processing for German exports often do not arrive at all, especially because of the lockdowns in China. An end to price increases and supply chain problems is not in sight.
In addition, the global economy and thus the demand for German products is likely to cool down further in the coming months, explained Treier. Emerging countries in particular will find themselves forced to conserve scarce foreign exchange funds in view of the extreme rise in energy, raw material and agricultural goods prices. “These will be economically difficult times, for example for German automobile, machine and technology exports.”
The President of the Federal Association of Wholesale, Foreign Trade and Services (BGA), Dirk Jandura, also sees “dark prospects”. The consequences of the Russian war of aggression and the disruptions in the international supply chains would also have a much greater impact on foreign trade. “And the situation could become even more dramatic if gas supplies from Russia were to be cut off.”
Jandura declared that more free trade was “there was no alternative”. In the current crisis, it is crucial that the largest economic and trading nation in the EU makes it clear that it is not pursuing an isolationist policy. The BGA President called for free trade agreements not to be “overburdened with issues and to fritter away more decades of negotiations”.
