The United States is the most important market for German corporations. But Trump’s zigzag course in the customs dispute ensures uncertainty. Exports are falling to the worst value for more than three years.
The German foreign industry suffers from the customs of the customs of the most important export market. Exports to the United States collapsed 7.7 percent compared to April in May, as the Federal Statistical Office announced. The value of the goods was 12.1 billion euros. That was the lowest value since March 2022.
“Now the advanced effects of the first quarter are moving into their opposite,” said Thomas Gitzel, chief economist at VP Bank. “US companies had German companies deliver significantly more goods in the first three months of the year before tariffs come into force.”
How the United States business continues depends on Donald Trump. On Monday, the US President extended the negotiation period until August 1, but so far the trade talks with EU representatives have remained without tangible results.
China business also weakens
The weak US demand also surprisingly reduced the overall German exports in May. They decreased by 1.4 percent to April to 129.4 billion euros. This is already the second minus in a row: In April, exports had dropped by 1.6 percent.
The China business is also weakening: exports to the People’s Republic fell by 2.8 percent to 6.8 billion euros. China now produces many goods that were previously imported from Germany. In contrast, exports to the United Kingdom rose by 15.1 percent to 7.2 billion euros, while the EU countries fell by 2.2 percent to 71.3 billion euros.
The atmosphere in the German export industry has recently become slightly cloudy. The export expectations determined by the IFO Institute fell to minus 1.7 points in July, from minus 1.3 points in June. “The export industry currently lacks dynamics,” said IFO expert Klaus Wohlrabe. There are few signs of substantial improvement.
Imports go back even more
Imports to Germany also decreased in May. They fell by 3.8 percent to 111.1 billion euros for the previous month.
“The severe decline in imports could be interpreted as a weakness of the internal economy,” said the chief economist from Hamburg Commercial Bank, Cyrus de la Rubia. However, the development often fluctuates strongly, which is why individual monthly numbers should not be overestimated.
