BERLIN, July 9 (Xinhua) -- Strong demand from other European Union (EU) countries has helped German companies compensate for a steep fall in exports to the United States in May, official figures published on Monday by the Federal Statistical Office show.
According to the Wiesbaden-based government agency, German exports to the United States slumped by more than 10 percent compared with the same period last year as a raft of protectionist tariffs imposed by the U.S. began to bite. Companies sold goods and services worth 8.5 billion euros (10 billion U.S. dollars) in total to Germany's single largest foreign market in May 2018, down from 9.5 billion euros in May 2017.
The "weak development of exports to the U.S. does not match the economic trend in America," Michael Groemling from the German Economic Institute (IW) told Xinhua on Monday. "Some of it are structural effects and adjustments -- for example in the automotive sector. How sustainable these will be cannot be estimated at present. Overall, this is not good news for the German economy."
However, the adverse effect of Washington's "America First" doctrine was largely offset by stable eurozone demand (plus 0.1 percent) for German goods and services and a rise in exports to EU members outside of the currency union (plus 6.5 percent). On a monthly basis, total exports declined slightly by 1.3 percent while imports increased by 0.8 percent.
As a consequence, Germany's trade surplus declined from 21.8 billion euros in May 2017 to 19.7 billion euros in May 2018. The country's current account surplus, or the balance of a country's international trade and investment inflows and outflows, fell from 15.2 billion euros to 12.6 billion euros during the same period.
Berlin has repeatedly been chastized by U.S. President Donald Trump, as well as the Washington-based International Monetary Fund (IMF) for allegedly contributing to global imbalances with a narrowly export-driven growth model. The IMF believes that permanent current account surpluses above six percent of Gross Domestic Product (GDP) endanger economic stability because they imply corresponding deficits and a build-up of international liabilities in other countries.
Combined with a monthly decline in exports by 0.3 percent in April this year, the figures published by the Federal Statistical office on Monday provided further tentative evidence of a longer-term shift in Germany towards lower trade surpluses. German chancellor Angela Merkel (CDU) has publicly signalled her willingness to help achieve more balanced international trade flows but at the same time also warned that the success of such measures would hinge on chronic deficit countries like the United States improving their competitiveness through domestic reform.
