Foreign trade: German exports rise for fourth month, US business grows

German exports have shown resilience, increasing for the fourth month in a row in May, signaling a potential bright spot for the country's economy amidst global challenges. The Federal Statistical Office reported that goods exports grew by 0.9 percent compared to the previous month, reaching 137.9 billion euros.

This growth exceeded economists' forecasts, who had anticipated a slight decline of 0.3 percent. The increase was largely fueled by higher demand from key markets, particularly the United States and China. In contrast, imports decreased by 2.5 percent during the same period, resulting in a widening trade surplus.

The United States remains the primary destination for German exports, with deliveries valued at 14.1 billion euros in May, a significant 23.1 percent increase from the prior month. Germany's trade with China also saw a notable rise, growing by 7.1 percent month-on-month to 6.2 billion euros. However, exports to EU member states experienced a slight downturn, falling by 1.1 percent to 78.3 billion euros.

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Despite all competitive disadvantages, exports are developing robustly.

Despite the positive export figures, economists urge caution. Alexander Krüger, Chief Economist at ABN Amro Germany, noted the robust performance despite competitive disadvantages, attributing it partly to the strong US economy. However, Thomas Gitzel, Chief Economist at VP Bank, warned that the substantial export growth to the US should not be mistaken for a trend reversal in transatlantic trade. He pointed to increased trade barriers, including tariffs imposed by the Trump administration, and the trend of companies relocating production directly to the US as factors that may limit future export volumes across the Atlantic.

Looking ahead, the escalating conflict in Iran could pose a risk to German exports. The recent declaration by US President Donald Trump nullifying the preliminary ceasefire agreement and subsequent military actions in the region could disrupt global trade and impact Germany's export-oriented economy.

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The substantial export growth to the USA should not be understood as a trend reversal in transatlantic trade.