The tariffs announced by the United States have exceeded all fears. Above all, the German key sectors car, mechanical engineering and chemistry expect significant losses.
The customs measures announced by US President Donald Trump have put all forecasts in the shade. Economists expect massive effects on the global economy. The former chief economist of the International Monetary Fund, Ken Rogoff, said in an interview with the BBC that Trump had thrown an atomic bomb on the world trade system.
Jörg Krämer, chief economist of Commerzbank, speaks of the end of an era. “From the end of the Second World War, we saw a long phase of globalization some time ago, where world trade rose faster than the world gross domestic product,” Krämer told the ARD finance editor. This ensured international division of labor and huge wealth gains. “This beneficial phase of globalization is definitely over.”
Decline in export and Economic output
The United States is the most important trading partner for the German economy. Ten percent of all German exports go there. Last year, deliveries with a value of over 160 billion euros reached a new record. A valued decline in export by 15 percent, which is forecast by the IFO Institute, for example, as a result of the tariffs, would also affect Germany overall. “We will feel that,” says the President of the Federal Association of Wholesale, Foreign Trade, BGA), Dirk Jandura.
If the tariffs are levied as announced, this would leave traces in the entire German economy. Economists expect a decline in gross domestic product (GDP) between 0.3 and 0.5 percentage points per year. A deep incision when you consider that the German economy grew by an average of 0.46 percent between 1970 and 2024.
Key industries are hit hard
The feared decline should also cost jobs, believes Dirk Jandura: “We will have to implement the tariffs into price increases, and in many cases this means a decline in sales.” In the case of smaller companies that have already been weakened from the past difficult years, that can also mean that.
With a view to the “export slackers” of the German economy, it quickly becomes clear which industries are particularly hard by customs measures: automotive production, mechanical engineering and the chemical industry are German bowl industries both in Germany and in foreign trade and are among its most important foreign markets.
Every fourth Porsche drives in the USA
Above all, the automotive industry: Last year, almost 450,000 vehicles from German production were exported to the USA. Almost every fourth Porsche was sold in the United States, at BMW and Mercedes the proportion was a good 16 percent. Hildegard Müller, President of the Association of the Automotive Industry (VDA), described the measures as “fundamental trade policy cut”. The consequences of the 25 percent tariffs on cars are difficult to assess at this early date.
The loads for machine and plant engineering are similarly strong. The VDMA industry association puts the proportion of deliveries to the United States to 14 percent of the total export volume, which was 200 billion euros in 2024. “It is a blow into the face of all exporters,” says Raloh Wiechers, main management VDMA.
Chemical and pharmaceutical products partially excluded
The United States is also the most important market outside of Europe for the chemical and pharmaceutical industry. According to the Chemical Industry Association (VCI), the German exports of chemical products to the USA amounted to goods worth 10.2 billion euros in 2024, and German pharmaceutical exports even had a value of 27.9 billion euros in 2024. VCI general manager of Wolfgang Große Entrup comments on the US tariff as a “deep blow”, but also emphasizes the importance of German companies as an employer in the United States. According to the Bundesbank, there are 128 chemical subsidiaries of German companies with 53,000 employees who generate sales of 65 billion euros.
However, a whole range of products that the United States itself do not have to be necessary or that are important for the United States would write from the additional tariffs, the Commerzbank economists Bernd Weidensteiner, Christoph Balz and Vincent Stamer write. These product categories are listed in an appendix to the executive instructions. This includes pharmaceutical products, fossil fuels, chemical products, semiconductors, minerals and wood. This affects a fifth of the US import. Pharmaceutical products are important for Germany (16 percent of German exports to the USA and chemistry (nine percent of exports).
In general, the German economy sees itself from the impending tariffs. On the one hand, the fear of sales in the USA, but also in other customer countries, if other export nations such as China are supposed to open up new markets are feared. However, there is no way around this for German companies. “The EU must now strengthen its alliances with other large trading partners and should vote on their reaction with them,” says Wolfgang Niedermark, member of the main management of the Federal Association of German Industry (BDI).
In the end everyone lose
For the United States, observers fear higher prices, falling purchasing power and a shrinking economic output with effects on the entire global economy. A system behind the announced customs measures cannot be recognized by economists. “Trump looked at where the deficits are larger and he put higher tariffs on it,” explains Achim Wambach, President of the ZEW – Leibniz Center for European Economic Research .. “Actually, this is a customs policy with the watering can, and that is not a good economy.”
For this reason, the business institutes and industry associations rely on negotiations to turn the customs wheel back. The new trading world has not yet arrived in the mind, even if it already has an effect on the markets and in the end only losers probably only knows.
