Germany's Chancellor Just Landed in Beijing with Three Auto CEOs. That Tells You Everything.

While Trump was delivering the longest State of the Union speech in American history last night — promising a "golden age" — Friedrich Merz was boarding a plane to Beijing.

He brought the CEOs of Volkswagen, BMW, and Mercedes-Benz. Not advisors. Not diplomats. The people who run Germany's industrial backbone.

That tells you everything.

The impossible choice

Germany is stuck between two bad options.

On one side: the United States, their security ally for 80 years, now led by a president who threatened 10% tariffs on all German goods unless Europe helps him seize Greenland. Those tariffs hit on February 1st. The Supreme Court tried to block them. Trump ignored it.

On the other: China, the world's largest auto market, where German carmakers are getting crushed by local competitors but still employ nearly 100,000 people and generate billions in revenue they can't afford to lose.

BMW's CEO put it bluntly last week: "Ignoring China would put our future economic success at risk."

Translation: we need Beijing more than Beijing needs us.

The numbers are brutal

Europe's trade deficit with China hit €359.3 billion in 2025—up nearly 20% from the year before.

German industry isn't just struggling in China anymore. Chinese competitors are beating them across Asia, Latin America, and Africa. The head of Germany's Institute of World Economy said this month that Volkswagen, BMW, and Mercedes "may cease to exist by 2030" without radical change.

That's not commentary. That's panic.

And Merz knows it. That's why he brought the CEOs with him. This isn't a diplomatic courtesy visit. It's an economic rescue mission.

What Germany wants (and what China wants)

Merz's pitch to Xi Jinping and Premier Li Qiang boils down to this: give German companies a fair shot in your market, and we'll keep investing here.

Germany poured more money into China in 2025 than in the previous four years combined. But "fair shot" is doing a lot of work in that sentence. Chinese automakers get state subsidies, cheap financing, and regulatory advantages that European companies can't match. The EU has tried imposing tariffs on Chinese electric vehicles. China responded by threatening to cut off rare earth exports.

So Germany arrives in Beijing with very little leverage.

China, meanwhile, wants something simple: Europe's continued cooperation while Washington tries to isolate Beijing. Every European leader who shows up in China and talks about "strategic partnership" is a crack in the transatlantic alliance. And right now, those cracks are turning into chasms.

The realignment is already happening

This visit isn't an outlier. French President Macron visited Beijing twice in 2025. Spain's Prime Minister went in December. Italy never left—Rome rejoined China's Belt and Road Initiative last year despite US pressure.

Europe isn't decoupling from China. It's de-risking from America.

The language is careful. Officials say they're seeking "balanced cooperation" and "fair competition." But the subtext is clear: we can't rely on Washington anymore, so we're hedging.

The problem? Hedging creates new dependencies. And dependencies become vulnerabilities.

The pattern repeats

When alliances fracture, everyone scrambles for new partners — and those new partnerships get built on weaker foundations than the old ones.

The US-Europe relationship was built on shared security threats, democratic values, and decades of institutional trust. The Germany-China relationship is built on desperation and opportunity.

Germany needs China's market to save its auto industry. China needs Germany's cooperation to weaken the Western alliance. Both sides know the other is using them. They're doing it anyway.

And that arrangement works great—until it doesn't.

When the next crisis hits—whether it's Taiwan, another pandemic, or a global recession—those fragile partnerships will be the first to collapse. But by then, the old alliances will be too damaged to rebuild quickly.

What happens next

Merz will meet Xi Jinping tomorrow. They'll talk about trade balance, market access, and Ukraine (China wants Europe to stop backing Kyiv; Germany wants Chinese pressure on Russia to end the war).

Merz will probably secure some small wins. Maybe China eases a few restrictions on German car imports. Maybe they sign a memorandum on green technology cooperation.

And then Merz will fly home and face the other reality: Trump's tariffs are still in place. The EU still has a €359 billion trade deficit. German industry is still losing ground.

The visits will keep coming. The speeches will keep talking about "strategic partnership" and "win-win cooperation." And the transatlantic alliance will keep crumbling, one diplomatic trip at a time.

Because when you're caught between a partner who's abandoning you and a competitor who's outplaying you, there are no good choices.

Just less-bad ones.

And right now, Beijing looks like the less-bad choice.