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German firms' China investments driven to four-year high by US trade wars
German firms raised investments in China by 55.5% to over €7 billion in 2025 to counter U.S. trade tariffs and reduce supply chain risks, IW German Economic Institute said.
- On Jan 27, 2026, Reuters reported German investments in China hit a four-year high, climbing to over 7 billion euros between January and November 2025, a 55.5% rise.
- Aggressive U.S. trade policies, including tariffs on European Union imports, pushed German companies to shift focus to China amid fears of geopolitical conflicts.
- Major German firms including BASF, Volkswagen and Mercedes‑Benz expanded China operations while ebm‑papst increased local production in 2025 to lower risks, the IW German Economic Institute noted.
- Earlier this month, Berlin is toughening its stance toward Beijing while seeking to avoid damage as China reclaimed its spot as Germany's top trading partner last year.
- The surge positions German companies to produce nearer customers and reduce exposure to tariffs, with 2025 investments in China exceeding the six billion euro average from 2010–2024, IW Institute reports.
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Due to Donald Trump's erratic customs policy, German companies are reducing their business in the US. Researchers see increased investments in China at the same time. This is a major problem for Germany's export balance.
·Germany
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Under Donald Trump, German companies' direct investment in the US is breaking down. Significantly more money flows to China in 2025. According to an IW expert, companies often bow to pressure from Chinese authorities.
German firms' China investments rose by 56% in 2025 to more than 7 billion euros, highest level in four years, German Economic Institute IW says
Exclusive-German firms' China investments rose by 56% in 2025 to more than 7 billion euros, highest level in four years, German Economic Institute IW says ... -January 27, 2026 at 01:02 am EST MarketScreener
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Total News Sources13
Leaning Left1Leaning Right3Center4Last UpdatedBias Distribution50% Center
Bias Distribution
- 50% of the sources are Center
50% Center
13%
C 50%
R 37%
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