China no longer needs Germany— and Germany wants a divorce.

Some German manufacturers think once-symbiotic partnership has turned into abusive relationship and they want out

- Tom Fairless & Bertrand Benoit

German Chancellor Friedrich Merz has said Berlin would protect domestic steelmakers from Chinese competitors.

(AFP)

For two decades, Germany and China were an economic couple made in heaven, both benefiting handsomely from booming global trade: Germany supplied the machines China needed to make consumer goods for the rest of the world.

Now China no longer needs Germany—and Germany wants a divorce.

For the first time in decades, German businesses and politicians are questioning the unfettered free trade that turned the country into an industrial powerhouse. Its manufacturers want protection from cheaper, faster and increasingly better Chinese rivals.

German Chancellor Friedrich Merz said last month that Berlin would protect domestic steelmakers from Chinese competitors. His government has tightened a ban on Chinese components in mobile-data networks and it has signaled support for “buy-European” clauses for public tenders.

In its first meeting in November, Merz's newly created National Security Council addressed the strategic risks of China’s dominance of several critical minerals. It is now working on diversification measures, according to a German official.

Germany’s estrangement from China has been in the making for some time. Helped by low production costs, a weak yuan and state subsidies, Chinese manufacturers are increasingly leading in sectors that German companies dominated until recently, not only in China but also in other markets, including in Europe.

Its timing, though, has much to do with President Trump. A wave of cheap Chinese goods, from chemicals to car parts, began washing over Europe this year after bouncing off the U.S.’s new tariff wall, economists and business executives say.