Editor's Note
This editor’s note highlights the key facts and market implications behind “Tariffs, Fear, and Propaganda: Why Our Distorted”, with emphasis on sourcing, product fit, fabrication, logistics, or buyer impact.
Tariffs, fear, and propaganda: why our distorted image of China is severely damaging the German economy – Image: Xpert.Digital The question 'Cui bono?' – who benefits? – is perhaps the most important of all economic policy questions. It is systematically obscured in the public discourse on China. Instead, narratives emphasizing threat or submission dominate: China as a technological aggressor stealing Western patents, or China as an enlightened partner in whom one can place absolute trust. Both extremes distort reality and benefit certain interest groups. Arms lobbyists profit from the threat narrative, while economic influence is obscured by the partnership narrative. The often unsettling truth lies somewhere in between – and this middle ground can be described with data. The geopolitical portrayal of China as an all-devouring monster is gaining ground – and it benefits some. In the United States, anti-China rhetoric primarily serves to justify protectionist trade policies, inflate defense budgets, and mobilize public support. The Trump administration followed this same logic: punitive tariffs imposed on China were used less as precise trade policy instruments than as a broad political signal designed to appeal to a wide electorate.
In Europe, the situation is evolving differently, but the automotive sector's interest is no less present. The automotive industry, once a bridge to Beijing, has reprioritized as Chinese brands began to establish themselves in its market. Institutional investors, who benefit from tariffs on Chinese electric vehicles, fund think tanks that publish analyses to this effect. The Bundesbank objectively notes that geopolitical risks related to China are leading to a fragmentation of global trade – but this fragmentation itself creates winners and losers, all located in the West. The history of the world knows no enduring global power. It is marked by hegemonies that emerge, reach their peak, and then decline in relative importance – not due to failure, but because others catch up. This pattern has repeated so regularly that it now has a name: the 'technological leap.' The figures are alarming: German exports to China fell by 7.6% in 2024, following a decline of 8.8% the previous year, a drop of nearly 16% in two years. This retreat continued in 2025: German exports to China fell by 9.7% year-on-year, while Chinese imports to Germany simultaneously rose by more than 8%. China remains Germany's main trading partner, with a trade volume of 251.8 billion euros in 2025, but the balance of trade has fundamentally changed. Previously, China mainly imported German cars and machinery. Today, it imports less from Germany because it produces many of these goods itself, and at a competitive cost.
The decline is particularly painful in the automotive sector, traditionally Germany's main export product. Chinese manufacturers like BYD, Geely, and SAIC are occupying market segments once reserved for German premium brands. Chinese automotive companies are also transforming from traditional car manufacturers into AI and robotics companies: BYD, Li Auto, and Xpeng are not only integrating artificial intelligence into their vehicles but also positioning themselves as technology companies that see the car as a platform. This is the real qualitative leap, and no European manufacturer has yet been able to compete on equal terms. The fundamental problem lies in the chronic weakness of domestic demand. Private consumption in China accounts for only about 40% of GDP, well below the global average. For comparison, this share exceeds 70% in the United States and is around 50% in Germany. For decades, China relied on exports, public investment in infrastructure, and an overheated real estate sector; now, all three pillars are showing signs of weakness.
China's projected trade surplus, estimated at $1.2 trillion in 2025, is impressive at first glance. However, it reveals more weakness than strength: faced with insufficient domestic demand, companies flood global markets with excess capacity. Exports serve as a safety valve for structural dysfunctions and, in doing so, simultaneously export deflation to international markets. China | Beijing's dilemma between export boom and domestic market stagnation: structural export dependence, a growth trap
Source: Read the original article | Published: April 23, 2026