German exports remain on a roll with the country breaking a trade surplus record in 2016.
The result catapulted Germany into the position of the world’s richest exporter, overtaking China, according to a respected economic think tank.
“Germany’s trade balance shows an estimated plus of $297 billion,” Christian Grimme of the Ifo Institute said on Monday.
This means that the country brought it more money from selling its goods and services to other countries than it spent on importing goods during the year. The German ministry of the economy noted that 44% of the surplus had come from sales to the UK and the US.
The result was a higher trade surplus than China which ended the year with a trade balance of $245 billion.
Last year the positions were reversed, with China scoring the highest balance of trade, followed by Germany.
Japan remained in third position.
The Ifo report also estimates that the USA had the largest trade deficit in the world in 2016, spending $478 billion more on imports than it earned from exports.
“That means that the USA is buying much more than it is producing and is going into debt abroad,” said Grimme.
The pattern, however, could well be broken in the space of just a year as the new US president’s policies could bring about an escalating trade war with the US. The Ifo Institute warned the result could include job losses in the thousands in German firms which sell to the US and at US companies with offices in Germany.
President Trump has already spoken of possible sanctions against Germany’s auto industry, saying he is prepared to impose tariffs on luxury car maker BMW if it continues construction of a planned factory in Mexico, rather than the US.
Moreover, the effects of Brexit are currently enshrouded in mist but are likely to become clearer as the year wears on.
