Germany’s claim to strategic autonomy falters as it remains economically bound to China and militarily reliant on the United States.

China is widely regarded in Washington as the primary systemic rival. The U.S. has framed Beijing not merely as a competitor but as a geopolitical challenger to the liberal order itself. Germany, officially, does not fundamentally disagree.

On a discursive level, German Chancellor Friedrich Merz signaled caution before his Beijing visit. He spoke of market distortions, human rights concerns and systemic differences. The vocabulary of "de-risking” was carefully deployed.

Yet, behind the rhetoric stands a stubborn economic reality.

In 2025, bilateral trade between Germany and China soared to about 251 billion euros (close to $300 billion), making China once again Germany’s largest trading partner, surpassing even the U.S. German imports from China reached roughly 170.6 billion euros, while exports to China stood at 81.3 billion euros, widening a persistent trade imbalance.

This structural pattern has real implications. German automotive exports to China, once the crown jewel of its industrial strategy, plunged by about one-third in 2025, with exports of vehicles and auto parts falling to below 14 billion euros, more than 50% down compared with 2022 levels.

The imbalance is echoed beyond the auto sector: small and medium-sized firms increasingly report rising competitive pressure from Chinese suppliers, with nearly a fifth citing Chinese competition as a major challenge.

That Germany still depends on China economically is clear. Germany’s economy remains heavily export-oriented, with roughly half of national output tied to exports, which is one of the highest ratios among major economies. China is not simply "a partner.” It is deeply embedded in the foundations of Germany’s growth model.

Berlin wants to de-risk, but it cannot afford to decouple. It wants to signal distance, but it depends on proximity. And so Germany tries to keep a balance policy that increasingly resembles confusion rather than strategic sophistication.

Transatlantic ties vs. economic dependency

Since the proclaimed "turning point" (Zeitenwende) speech delivered by then-Chancellor Olaf Scholz, just days after the beginning of Russia’s full-scale invasion of Ukraine, Germany has dramatically increased defence spending. In the wake of that address, the federal government decided to establish a 100 billion euro special defense fund (Sondervermögen) to modernize the Bundeswehr, which was an unprecedented move in post-war German history.

The shift carries particular historical weight. Following World War II, Germany was demilitarized as part of the Allied denazification process and for decades cultivated the image of a civilian power (Zivilmacht) that prioritized diplomacy, multilateralism and economic statecraft over hard power. Against this backdrop, the Zeitenwende marked not merely a budgetary adjustment but a profound rupture in Germany’s foreign and security policy tradition, signalling a readiness to assume greater military responsibility in an increasingly unstable European security order.

After decades of underinvestment that once left defense outlays below NATO’s 2% guideline, Berlin now plans to raise military expenditure from about 2.1% of GDP in 2024 to as much as 3.5% by 2029, financing this through expanded budgetary commitments.

In absolute terms, the defense budget is set to more than double from roughly 62 billion euros in 2025 to over 150 billion euros within a few years, a staggering increase that would bring German military spending closer to France’s and recalibrate European defense capacity.

This very rearmament underscores a paradox.

Germany speaks the language of strategic autonomy. But in security matters, it remains dependent on American military infrastructure, intelligence and nuclear deterrence.

Germany criticizes Beijing rhetorically. But economically, it remains deeply intertwined with Chinese markets and manufacturing ecosystems.

Merz’s visit exposed this tension. In Munich, he warned about China’s ambition to reshape the multilateral order. In Beijing, the tone softened. Gratitude replaced warning. Economic opportunity overshadowed systemic rivalry.

Is this realpolitik? Perhaps. But it also demonstrates the absence of a coherent foreign policy identity anchored in clear priorities.

Structural ambivalence

Germany today appears less like a confident geopolitical actor and more like a nervous export power trying to preserve yesterday’s economic model in tomorrow’s geopolitical environment.

The old formula of "Wandel durch Handel" ("change through trade") is politically discredited, yet economically still alive. The Zeitenwende was proclaimed with historic gravity, yet its implications remain incomplete.

Germany’s economic slowdown is structural. Growth is broadly stagnant, with the economy expected to hover near zero growth in 2025 before a modest rebound. High energy costs remain an enduring burden, partly rooted in policy decisions like the phase-out of nuclear power that have left Germany more reliant on volatile global energy markets.

Merz warns about China, yet German car manufacturers generate a significant share of their global profits in the Chinese market even as that market shrinks for German exporters.

Germany wants to be a geopolitical actor without fully accepting geopolitical costs. It wants economic openness without strategic vulnerability. It wants values without consequences. These are not merely inconsistencies but ambivalence, and the era of comfortable ambiguity is ending.

Country in search of itself

And finally, there is an even deeper layer to Germany’s hesitation: identity.

For nearly two decades, during the Merkel era and especially under the previous "traffic light” coalition, Berlin invested heavily in the narrative of a values-based foreign policy. Human rights, multilateralism and normative power became central to Germany’s diplomatic self-image.

Now Merz signals a change by speaking less of moral instruction and more of national interest. He criticizes the moralizing tone of German diplomacy in recent years, implying that Berlin must pivot toward a more interest-driven realism.

However, identities cannot be rebranded overnight.

A country that has spent years cultivating the image of a normative power cannot suddenly operate like a cold strategic balancer without friction, domestically or internationally. Political elites, bureaucratic culture, coalition constraints, and public expectations are still shaped by the legacy of Merkel’s caution and the "traffic light” government’s values-driven diplomacy.

Merz is therefore caught in a structural dilemma of his own making. He wants to pivot away from a moralized foreign policy, yet he governs a country whose political culture has internalized exactly that posture. He wants realism, yet Germany’s institutional reflex remains normative. He wants strategic clarity, yet the diplomatic apparatus still speaks the language of values.

This is why the change in German foreign policy feels hesitant, uneven and at times contradictory.

Germany has already declared that it no longer wants a purely values-based foreign policy. But transforming that declaration into a coherent strategic doctrine will take years, perhaps a generation.

And until that transition is complete, Berlin will oscillate: between moral rhetoric and economic pragmatism, between transatlantic loyalty and cautious outreach to Beijing, between strategic ambition and structural inertia.

What we are witnessing is not simply policy inconsistency. It is a slow identity transformation under geopolitical pressure.