Report Reveals Trump’s Tariffs Could Cripple German Exports to U.S.
(MENAFN) German think-tank the ifo Institute projects that US President Donald Trump’s tariffs may cause a dramatic drop—exceeding 38%—in German exports destined for the United States.
According to their latest analysis, Germany’s manufacturing sector could contract by 2.8% if the stalled tariff talks between Washington and the European Union break down and the US imposes comprehensive tariffs on Germany and the EU.
The report highlights a steep 38.5% plunge in German exports to the US under this scenario, alongside a more modest 2.8% decline in exports to China.
Significant damage is forecasted for Germany’s automobile and pharmaceutical industries, with the auto sector facing a potential 6% loss in added value and the pharmaceutical sector risking a 9% reduction.
Conversely, the services and agriculture industries might see slight growth, increasing by 0.4% as a result of the tariffs.
These predictions stem from the anticipated reinstatement of reciprocal tariffs that were temporarily suspended during a 90-day pause and negotiation period starting April 2, which is set to expire on July 9.
Post-July 9, EU exports to the US are expected to be burdened with tariffs reaching 50%.
The ifo Institute’s calculations factored in the 25% tariffs targeting steel, aluminum, cars, auto parts, pharmaceuticals, and electronic goods. Notably, the estimates do not account for any retaliatory tariffs the EU might impose on US imports.
In 2024, the US remained Germany’s top trading partner, with bilateral trade surpassing €250 billion ($290 billion). German goods worth $186.2 billion were exported to the US—marking a 2.2% year-over-year increase and representing 10.35% of Germany’s total export value.
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