German trade surplus smallest in nine months

Germany’s trade surplus narrowed to EUR 14.9 billion in July 2025, down from an upwardly revised EUR 15.4 billion in June and missing market expectations for an unchanged reading. This marked the smallest surplus since October 2024, as exports contracted more sharply than imports, underscoring the ongoing fragility of global demand.

Exports slipped 0.6% month-over-month to EUR 130.2 billion, reversing part of the gains seen earlier in the year. The decline was driven largely by weaker demand from outside the European Union, where shipments fell 4.5%. Notably, exports to the United States plunged 7.9%, the steepest drop in over three years, bringing sales to their lowest level since December 2021.

Analysts attributed the fall to softer U.S. investment demand, a stronger euro, and lingering trade tensions linked to Washington’s proposed tariff measures. In contrast, intra-EU trade provided some cushion: shipments to EU partners climbed 2.5% overall, with exports to the Euro area up 2.5% and to non-Euro EU members up 2.6%.

Imports eased marginally by 0.1% to EUR 115.4 billion, following a sharp, downwardly revised 4.1% surge in June. The latest decline was concentrated in purchases from non-EU countries, which dropped 1.3%, reflecting weaker demand for energy and intermediate goods. Imports from EU partners, however, rose by 1.1%, highlighting stronger intra-regional trade flows as domestic consumption showed tentative signs of resilience.

Looking at the broader trend, Germany posted a year-to-date trade surplus of EUR 119.5 billion, with exports edging higher by just 0.7%, while imports rose a faster 4.9%. This dynamic reflects a structural narrowing of Germany’s trade balance, as slowing global demand, heightened geopolitical uncertainty, and higher import costs weigh on the traditional export-driven growth model.

Economists noted that while Germany remains a net exporter, the persistent weakness in extra-EU shipments—particularly to the U.S. and China—raises concerns about the country’s exposure to external shocks. Combined with recent industrial production volatility, the trade data reinforce the view that Germany’s economy is shifting into a more modest growth phase, increasingly reliant on domestic demand and EU trade partners to offset external headwinds.