US tariffs impact show up in German and French trade numbers, but is there a bigger worry?

Today, Germany and France released their trade figures for December and the whole of 2025, highlighting key trends in their trading relationships. Notably, Germany has seen a significant decline in exports to the US by 9% year-on-year, while imports from China have risen over 9%. For France, exports to the US remain resilient, even as wine and spirit exports plunged in Q4. The negative impact of Trump-era tariffs on trade relations is evident, prompting Germany to seek stronger ties elsewhere, particularly with China. This pivot is enabling China to enhance its position within European markets, particularly in sectors like electric vehicles and renewable energy products. The compelling question is how these shifting dynamics will reshape future trade relations and market conditions, especially as China's competitive pricing may affect domestic supply chains in importing countries, potentially leading to a risk of deflation in the long term.