German exports unexpectedly fell in July on a sharp decline in US demand due to tariffs, while industrial output rose, data showed on Monday.
Exports from Europe’s biggest economy fell by 0.6 percent in July from the previous month, data from the federal statistics office showed. A Reuters poll had forecast a 0.1 percent increase.
Exports to the United States were down 7.9 percent from June. Germany’s export-oriented economy is expected to be badly affected by US import tariffs. The US was Germany’s biggest trading partner in 2024 with two-way goods trade totalling 253 billion euros ($297 billion).
The US imposed a 15 percent import tariff on most goods from the EU in a deal reached with the bloc in July to avert a bigger trade war between the two allies, which account for almost a third of global trade.
Another trading superpower, China, saw its export growth slow to a six-month low in August as a brief boost from a tariff truce with the US faded, and China’s exports to the US were down 33 percent year-on-year in August.
German exports to EU countries rose by 2.5 percent on the month, while goods to other countries outside the EU declined by 4.5 percent.
Ralph Solveen, senior economist at Commerzbank, said there was hope that German deliveries to other euro area countries would increase, meaning that exports overall would not slow the economy as much as some fear.
Imports fell 0.1 percent from June.
The foreign trade balance showed a surplus of 14.7 billion euros ($17.2 billion) in July, down from 15.4 billion euros in June and 17.7 billion euros in July 2024.
Meanwhile, German industrial production rose by 1.3 percent in July from June. Analysts polled by Reuters had predicted a 1.0 percent rise.
The less volatile three-month on three-month comparison showed that production was 0.1 percent lower in May-July than in the previous three months.
A monthly fall in production in June was revised down to 0.1 percent from 1.9 percent. The statistics office attributed the revision partly to corrections from a large automotive firm.
“Hopes for at least a cyclical recovery in German industry remain alive,” said Carsten Brzeski, global head of macro at ING.
However, data issued on Friday showed German industrial orders unexpectedly falling for the third consecutive month, by 2.9 percent in July.
US stocks closed slightly lower on Friday, with the Dow shedding almost half a percent, the S&P 500 dipping about a third of a percent and the Nasdaq ending roughly flat.00:0301:46
Commerzbank expected production to pick up on the back of interest rate cuts by the European and other central banks.
