After the significant declines of recent years, exports from January to June were nominally only 1.4 percent below the previous year's level. The total export volume amounted to 22.8 billion euros. However, the foreign business of mechanical engineering companies continues to be shaped by geopolitical crises, trade policy uncertainties, and increasingly tougher international competition. Nevertheless, the downward dynamics weakened during the second quarter.
US market stabilizes, significant decline in business with China
The business with the United States, the most important foreign market for mechanical engineering companies in the southwest, developed positively. After a better performance in the second quarter, exports in the first half of 2026 slightly increased by 0.6 percent compared to the previous year to 3.6 billion euros. This meant that the share of the USA in total machine exports from Baden-Württemberg was 15.6 percent. However, protectionist US trade policy and the strong euro remain significant burdens for export business.
The business with China proved to be significantly more difficult. Exports to the People's Republic fell by 26.5 percent in the first half of 2026 to around 1.5 billion euros. As a result, China fell further behind France and remains only in third place among the most important sales markets. Exports to the neighboring country reached nearly the previous year's level at 1.7 billion euros.
EU internal market continues to gain importance as a sales area
Exports to European partner countries developed positively. Exports increased by 1.8 percent to a total of 10.6 billion euros. Thus, 46.4 percent of total machine exports from Baden-Württemberg went to the EU internal market. This development underscores its increasingly important role as the most significant trading area for mechanical engineering companies in the southwest.
Exports to the Netherlands particularly increased with a rise of 14.6 percent to 1.2 billion euros. Exports to the Czech Republic also rose by 9.4 percent to 0.7 billion euros. Exports to Sweden recorded an increase of 17.0 percent to 0.5 billion euros.
Even outside of Europe, some sales markets developed positively. Exports to India increased by 13.8 percent to 0.5 billion euros. Canada recorded an increase of 13.3 percent to 0.3 billion euros, while Brazil saw a rise of 8.1 percent to also 0.3 billion euros.
Dr. Dietrich Birk, Managing Director of VDMA Baden-Württemberg While business in the USA has stabilized despite significant uncertainties, the persistently weak demand from China shows how much the weights are shifting in global markets. At the same time, the growing presence of Chinese suppliers intensifies international competitive pressure. In particular, the state-supported, systematic buildup of overcapacities leads to structural competitive distortions. It is therefore all the more important for our companies to consistently leverage the potential for strategic diversification and to position themselves more broadly in export markets.
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