A Black Friday Shock for German Retailers

The pressure from Chinese imports has risen significantly this year. According to a report by the German Economic Institute (IW), commissioned by the Federal Foreign Office, high US tariffs have prompted many Chinese companies to redirect their exports to Germany. For instance, German imports of plug-in hybrid vehicles from China rose by 80 percent in the first half of this year, while imports of the same cars to the United States dropped by nearly 99 percent. This shift has strengthened China’s presence in the German market even further.

New analyses show that the surge of Chinese goods ahead of Black Friday has severely reduced German retailers’ profit margins. A joint study by Kearney and 7Learnings found that increased supply across 35 product categories led to a 144-million-euro drop in profits and triggered unprecedented price pressure. Due to high US tariffs, many Chinese manufacturers have diverted their exports to the EU, boosting supply by around 11 percent. Retailers, in order to avoid excess inventory, are forced to offer deeper and earlier discounts, which puts their profitability under even more strain in an already challenging economic environment.

Experts say this development is also linked to price dumping, a topic that featured prominently during German Finance Minister Lars Klingbeil’s early-November 2025 trip to China. In the second quarter of 2025, as US tariffs on Chinese goods surged to as high as 145 percent, concerns grew about export diversion and the weakening of German domestic manufacturers. Current data now confirms that these concerns were well-founded.

Source: Handelsblatt