German exports plummeted due to tariffs

German exports to the US have declined sharply this year due to the impact of tariffs imposed by the administration of US President Donald Trump

Overall, German exports to the US in the first three quarters of 2025 fell by 7.8% year-on-year, a complete reversal from the average growth of nearly 5% between 2016 and 2024. The German automotive sector suffered the most, with exports falling by almost 14%, while the engineering and chemical sectors both recorded declines of around 9.5%. Experts predict that exports from Germany to the US will struggle to recover strongly, as tariff reductions are unlikely in the near future.

The US is the largest buyer of "Made in Germany" goods ever, making tariffs even more damaging to the German economy . Since April, exports of cars and auto parts to the US have initially been subject to a particularly high additional tariff of 25%. Only when a tariff agreement between the European Union (EU) and the US is signed in the summer of 2025 will a general tariff of 15% be applied to these items.

The situation is not much better for German machinery manufacturers in the US. German machinery exports to the US also fell by 9.5%. According to IW, "German machinery exports to the US are also subject to significantly higher tariffs of 50%, applied to steel and aluminum and products made from these metals." The chemical industry has also not escaped the downward trend. Business in this sector in the US fell sharply by 9.5%, possibly not solely due to tariffs.

The German Institute for Economic Research (IW) stated: "Other factors may also be playing a role in the downturn in the chemicals sector, such as lower production in Germany due to rising energy prices."

On average across all sectors, German exports to the US fell by 7.8% in the first three quarters of the year. Over the same period from 2016 to 2024, German exports to the US increased by an average of nearly 5%.

IW researcher Samina Sultan emphasized: "Since it must now be assumed that US import tariffs will not return to pre-Trump levels in the near future, it is difficult to expect a significant recovery in German exports to the US." This means that the current trend should be considered the "new normal " for German exporters to the US.

Therefore, IW recommends investing more heavily in developing alternative export markets. Sultan said: "To achieve this goal, the systematic removal of existing trade barriers within the EU single market remains essential. But trade relations with third countries must also be expanded through the swift conclusion of free trade agreements."

Source: VTV