German Trade Agency Forecasts Record €146 Billion Asia-Pacific Deficit for 2026

Germany's trade deficit with the Asia-Pacific region is projected to approach a record €146 billion in 2026, according to a report by the state-owned trade promotion agency Germany Trade & Invest, reported on October 28. The forecast highlights a widening gap between German exports to the region and imports from it, particularly as sales to China weaken.

The agency expects Germany's goods exports to 29 core Asia-Pacific economies to decline by 3.2% this year to €185.3 billion. Imports from those markets are forecast to increase by 6.4% to €330.9 billion. The difference is approximately €145.6 billion. These figures are estimates for the full year, not a finalized trade balance.

China accounts for roughly half of Germany's merchandise trade with the Asia-Pacific economies covered by the report. German manufacturers have faced weaker demand and stronger local competition in China, especially in sectors that have traditionally been central to Germany's export economy, including machinery and automobiles.

According to the report described by Reuters, German machinery exports to China fell 18% in the first seven months of 2026 compared with the same period a year earlier. Automotive exports to China declined 30% over those months. The figures reflect shipments during a completed period, whereas the projected regional deficit refers to the whole of 2026.

The contrast with other Asian markets is important. Excluding China, German exports to the remaining economies in the agency's Asia-Pacific group are expected to grow 2.8% this year. On that basis, the projected trade deficit with the region outside China would be just under €35 billion. This does not mean other markets fully offset the weakness in China, but it shows that the regional picture is uneven.

India is becoming more significant to German companies as both a customer and a supplier. The report says German exports to India and imports from the country have each nearly doubled over the past decade. Southeast Asian economies are also gaining importance in manufacturing supply chains and as destinations for German goods. The agency expects exports to the Association of Southeast Asian Nations to rise faster than imports in 2026, helped in part by aircraft deliveries.

Germany's relationship with Japan is described as comparatively stable, despite the effect of the weaker yen on Japanese purchasing power. Across the region, Germany is increasingly importing electronics and electrical equipment, reflecting changes in the types of products Asian factories supply.

The figures were released during German Chancellor Friedrich Merz's visit to several Asian economies, where trade diversification and cooperation have featured prominently. However, the agency's projections do not establish that any particular diplomatic proposal will reverse the imbalance. They measure and forecast trade flows, not the success of future policy.

A merchandise trade deficit means the value of imported goods exceeds the value of exported goods. It does not by itself measure investment flows, services trade or the overall economic benefit of commercial relationships. The forecast also remains subject to changes in demand, exchange rates, tariffs and industrial production before the year ends.

The report points to a structural challenge for Germany's export industries: sales to China have become harder to sustain even as trade links with other Asian markets continue to expand. Whether the projected €146 billion deficit materializes will depend on the remaining months of 2026 and the final statistical data.

Sources: Germany Trade & Invest projections reported by Reuters on October 28, 2026, carried by AOL; EUToday independent reporting and analysis, October 28, 2026.