Germany’s export-driven economic model came under unusual, simultaneous pressure as shipments to the US fell precipitously and exports to China declined concurrently, according to trade data. This led Germany to a record trade deficit with China of nearly €90 billion and revealed the increasing vulnerability of its position in international trade.
In a recent research supported by the Federal Foreign Office, the German Economic Institute (IW) states that “the close transatlantic trade relationship is coming under significant strain due to US President Trump’s tariff policy.
Particularly heavily hurt are German exports of machinery, chemicals, and automobiles and parts, which together make up more than two-fifths of German exports to the US, according to the report.
Taken together, these three industries have caused Germany’s exports to the US to decline by more than 5.2 percentage points relative to the prior year, accounting for more than two-thirds of the total decrease. President Donald Trump’s increased tariff offensive following his return to office was a major factor in the decline in exports to the US. Due to tariffs of up to 50% on steel, aluminum, and related products, German machinery exports declined by 9.5% and automobile exports plummeted by 14% to the United States.
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