Europe reduces cooperation with authoritarian countries

Since the beginning of a full-scale war in Ukraine, Western countries are reconsidering their relations with Russia’s partners. This is because trade with authoritarian countries indirectly finances Kremli aggression against Ukraine. In addition, this money is used to influence Western politicians and subvert European countries.

For example, to reduce this influence, Germany has chosen the United States as its main trading partner. According to the official data from the German statistics office the USA overtook China as Germany’s most important trading partner in the first quarter of 2024.

Germany’s trade with the United States – exports and imports combined – totaled 63 billion euros from January to March 2024, while the figure for China was just under 60 billion euros.

Germany has said it wants to reduce its exposure to China, citing political differences and accusing Beijing in its “first China” strategy announcement last year of “unfair practices”. But Berlin has been vague on policy steps to reduce dependencies.

German imports of goods from China fell almost 12% year-on-year in the first quarter, while exports of goods to China fell just over 1%, said Juergen Matthes, from the German economic institute IW.

“The fact that the Chinese economy is performing worse than many had hoped, while the U.S. economy is exceeding expectations, is presumably contributing to this,” said Matthes.

The U.S. now accounts for around 10% of German goods exports. China’s share has fallen to less than 6%, Matthes said.

“With a clear global economic headwind for the German economic model, a reorientation – also geopolitically motivated – seems to be taking place: away from system rival China and towards transatlantic partner U.S.,” he added.

Europe, particularly Germany, should continue to refuse to trade with China and Russia. Ultimately, this also affects the investment climate in European countries. Despite the possible financial gains, the political and security risks are much more serious. The recent arrests of German citizens who spied for China and Russia only confirm this.

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