German firms face export headwinds as us trade barriers mount

2025-03-27 general

Berlin, Thursday, 27 March 2025.
A recent survey by the German Chamber of Commerce reveals growing concerns among German companies. Protectionist measures from Washington are complicating business, particularly in the United States. These rising trade barriers are not only delaying export recovery but also shifting perspectives. A staggering 70% of surveyed companies now anticipate negative impacts from U.S. trade policies. This marks a sharp contrast from last year when the U.S. was viewed as a promising market. Half of German companies active in the U.S. are already feeling the pinch of higher tariffs.

Tariffs and trade tensions

Adding to the complexity, President Trump’s recent imposition of a 25% tariff on imported vehicles to the U.S. is expected to further destabilize both European and U.S. economies [1][3]. German auto associations are advocating for immediate negotiations to prevent an escalating trade war [1]. These tariffs, slated to take effect on April 3rd, will apply to all imported vehicles and critical auto parts [3]. Trump has stated that these tariffs are due to the difficulty U.S. carmakers face exporting to the EU [3].

Impact on german auto exports

Deloitte projects a potential 3.2% annual decrease in German exports to the U.S. until 2035, a drop from €84 billion to €59 billion [3]. In 2024, the U.S. accounted for 13.1% of German car exports [3]. Great Britain and France followed, with 11.3% and 7.4% respectively [3]. These trade barriers are not limited to tariffs alone. Local certification requirements and increased security regulations add to the difficulties, increasing costs and complicating planning for German firms [1].

Broader economic implications

The German government remains opposed to a boycott of U.S. goods despite the tariffs [5]. A government spokesperson emphasized Germany’s continued interest in maintaining positive relations with Washington, highlighting that an export-driven nation like Germany needs fewer, not more, trade barriers [5]. However, the DIHK anticipates a decline in German exports for 2025 and expresses heightened pessimism following Trump’s tariff announcement [6]. The projected decrease of 1% is now viewed as optimistic [6].

Investment strategy adjustments

For investors, these developments suggest a need to reassess exposure to German companies heavily reliant on U.S. exports, particularly in the automotive sector. Companies like BMW, Volkswagen, and Mercedes-Benz could face increased pressure [3]. Simultaneously, the perceived unreliability of the U.S. market may enhance Europe’s attractiveness as a stable investment destination [7]. Investors might consider shifting focus towards companies that can capitalize on stronger intra-European trade or diversify into markets less affected by U.S. trade policies [3].

Bronnen

Trade Restrictions German Exports