German exports fell again in August. For the German Chamber of Commerce and Industry, DIHK, the decline is more than a monthly fluctuation. Trade tensions, weak industrial activity and structural disadvantages at home are putting pressure on an economic model that has underpinned German prosperity for decades. The latest figures also highlight how difficult it has become to reduce dependence on a small number of key markets.

Germany’s export economy remains on the defensive. Calendar- and seasonally adjusted exports fell by 0.8 per cent in August compared with the previous month, while imports rose by 0.9 per cent. Exports were still 6.2 per cent higher than in August 2025, but the German Chamber of Commerce and Industry, DIHK, sees little evidence of a sustained turnaround.

Volker Treier, the DIHK’s head of foreign trade, argues that exports continue to lack their own underlying momentum. Trade-policy uncertainty and structural weaknesses at the German business location are preventing a more durable recovery. In the chamber organisation’s view, temporary improvements are insufficient as long as they depend on individual markets, exceptional orders or short-term statistical effects.

The assessment points to a larger question facing Europe’s biggest economy: can Germany’s traditionally export- and industry-led growth model still generate the same degree of prosperity under fundamentally different geopolitical and economic conditions?

The United States: from growth engine to source of uncertainty

The shift is particularly visible in Germany’s commercial relationship with the United States.

For decades, the US has been one of the most important and dependable destinations for German industrial exports. Today, however, it has also become one of the markets most affected by trade-policy uncertainty.

In the DIHK’s special Going International 2026 survey, 67 per cent of German companies with business activities in the United States cited trade-policy uncertainty as a burden. Fifty-four per cent reported rising customs costs and administrative requirements, while 48 per cent pointed to financial-market and exchange-rate risks.

For German exporters, this matters disproportionately. Mechanical engineering, automotive manufacturing, chemicals, electrical engineering and large parts of the industrial Mittelstand have built their international business around predictable market access and relatively stable trading conditions.

That environment is becoming less reliable.

According to the DIHK, questions surrounding US trade policy have become one of the most important advisory topics for regional chambers of commerce. Tariffs, export controls and increasingly complex customs requirements are raising the cost of international business even in markets that German companies cannot afford to ignore.

The result is a difficult paradox: the strategic importance of the US market remains high, while the friction involved in doing business there continues to increase.

China is becoming a more difficult proposition as well

China offers little relief.

Economic relations between Beijing and the European Union are increasingly shaped by disputes over market access, subsidies, export restrictions and competition in strategically important technologies.

The DIHK has therefore called for a negotiated settlement of outstanding trade disputes between the EU and China. From the chamber organisation’s perspective, European companies need improved access to the Chinese market, fewer discriminatory barriers and fairer conditions in public procurement.

The challenge, however, goes well beyond market access.

German companies increasingly face Chinese competitors in sectors that were once regarded as strongholds of German industry. Machinery, industrial technology, automotive manufacturing and numerous other export-oriented sectors are experiencing intensifying competitive pressure from Chinese producers.

That changes the economic relationship fundamentally.

China is no longer simply a supplier, manufacturing base and major customer for German industry. It has also become one of its most formidable industrial and technological competitors.

The problem begins at home

The DIHK nevertheless warns against attributing Germany’s export weakness solely to Washington or Beijing.

A substantial part of the problem, it argues, is domestic.

High energy prices, labour costs, corporate taxation, bureaucracy and lengthy administrative procedures have all weakened Germany’s international competitiveness. The call for better framework conditions at home therefore runs through virtually all of the DIHK’s recent economic statements.

Industrial production provides little reason for complacency.

Although output rose month on month in August, industrial production remained slightly below its year-earlier level. In energy-intensive sectors, production has fallen to levels not seen since late 2023, according to the DIHK.

For an economy in which exports remain closely linked to a broad industrial base, this is more than a cyclical weakness. A declining or stagnating industrial sector ultimately reduces the country’s ability to defend market share abroad.

Germany’s export problem is therefore increasingly inseparable from its industrial problem.

Growth — but on what foundation?

The German government’s autumn forecast points to economic growth of 1.3 per cent in 2026 and 1.1 per cent in 2027.

The DIHK is considerably more cautious about the quality of that growth.

Its chief executive, Helena Melnikov, has argued that a significant share of the current momentum stems from the European single market and from higher public spending on infrastructure and defence. Private investment and domestic demand, by contrast, remain weak.

That distinction matters.

Government expenditure can support aggregate demand and stabilise economic activity in the short term. It cannot permanently substitute for private investment in new factories, technologies, products and production capacity.

The DIHK’s latest economic surveys suggest that more companies are cutting investment than increasing it. Private investment also remains well below its pre-pandemic trajectory.

For Germany, this creates a potentially damaging imbalance: the state is injecting more money into the economy, while companies remain reluctant to commit capital of their own.

A recovery built predominantly on public spending may lift growth statistics. It does not automatically create the productivity gains and industrial capacity required for long-term competitiveness.

Europe is becoming even more important

As access to the US and Chinese markets becomes more complicated, the European single market is acquiring even greater strategic importance for German industry.

The DIHK is therefore calling not only for reforms within Germany, but also for a more ambitious European trade policy.

New trade and raw-material partnerships could broaden export markets and reduce dependence on individual countries. The organisation has repeatedly argued that greater economic security should not be confused with economic isolation. In its view, resilience ultimately comes from having more options: a wider range of suppliers, customers and commercial partners.

That distinction is important at a time when industrial policy around the world is increasingly shaped by protectionism, subsidies and strategic decoupling.

For an economy as export-oriented as Germany’s, retreating into competing economic blocs would be particularly costly.

Access to new markets is therefore becoming part of domestic economic policy. Trade agreements with countries such as India and Indonesia, as well as closer economic partnerships with emerging markets in Africa and elsewhere, are no longer merely foreign-policy instruments. They are increasingly important for Germany’s ability to diversify its commercial exposure.

Germany’s export problem is also a competitiveness problem

A 0.8 per cent monthly decline in exports would not, on its own, justify fundamental doubts about Germany’s economic model.

Monthly trade data are volatile. Large industrial orders can distort figures, while geopolitical developments can shift demand rapidly.

Taken together with weak industrial production, subdued private investment and growing trade barriers, however, the picture becomes harder to dismiss.

German companies are encountering a more difficult global economy from a weaker domestic position.

That is why the debate over exports can no longer be treated as a conventional foreign-trade discussion.

New free-trade agreements could open markets. A less confrontational relationship with China could reduce uncertainty. Greater predictability in transatlantic trade would undoubtedly help German companies.

But none of these developments can substitute for reforms at home.

Treier summarises the DIHK’s position succinctly: “Strengthening competitiveness must become an economic-policy priority.”

The central question for the coming years is therefore not simply whether global demand will recover.

It is whether Germany can adapt quickly enough to a world in which the assumptions underpinning its old export model no longer apply.

For decades, German industry benefited from a powerful combination: comparatively affordable energy, expanding global trade, strong demand from China and reliable access to the US market.

That combination can no longer be taken for granted.

Germany’s next export upswing will therefore depend less on whether the global economy once again provides a favourable tailwind — and increasingly on whether German companies can remain competitive when it does not.