German export outlook slips on trade fears
Earlier this year, US President Trump imposed 20% tariffs on EU goods and 25% duties on steel, aluminum, and cars. Brussels prepared retaliation, but most of the new levies were paused for 90 days to allow talks.
A 10% base tariff and targeted 25% duties remain unchanged.
'The tariff threats from the US are still on the table. An agreement between the EU and the US has yet to be reached,' Klaus Wohlrabe, head of Ifo surveys, said in a statement on Wednesday. 'This uncertainty is lowering exporters' expectations.'
According to the report, the mood among export companies has 'clouded over,' with the export expectations index falling to -7.4 points in June from -5.0 in May. The index measures how optimistic or pessimistic German manufacturing companies are about their prospects for selling abroad over the next three months.
The trade barriers have raised concerns in German industry, especially the automotive sector, which is grappling with declining sales, growing competition from China, and the shift to e-mobility. Carmakers worry that tariffs could damage their vital export business.
'Companies fear that the growing protectionism around the world will increasingly hamper international trade,' said Wohlrabe.
The decline was most noticeable in the chemical and automotive sectors, where expectations turned significantly negative, the report said.
The US was Germany's top trading partner in 2024, with bilateral goods trade totaling €253 billion (around $280 billion), according to official data.
In the first quarter of 2025, the country recorded a €17.7 billion trade surplus with the US—the highest among all its partners. This underscores the potential impact of US tariffs. Experts say the uncertainty has led German companies to delay investments, contributing to the shift in export projections.
The new figures add to signs that the EU's largest economy is struggling to build momentum after slipping into a recession last year. Although German GDP grew slightly (by 0.2%) in the first quarter of 2025, weak global demand and uncertainty in trade policy continue to weigh on its economy.
The report follows a grim forecast from the IMF, which also cut Germany's 2025 growth outlook to zero, predicting it will be the only G7 economy to stagnate this year as its export-driven industries are especially vulnerable to global trade tensions.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Russia Today
7 hours ago
- Russia Today
Kiev's European backers must ‘put up or shut up'
Kiev's European backers should stop making demands on Washington and contribute more to the resolution of the Ukraine conflict, US Treasury Secretary Scott Bessent has said. President Donald Trump has a 'negotiating strategy' ahead of the summit with his Russian counterpart, Vladimir Putin, in Alaska on Friday, and what he needs is 'some coordination' from the EU, Bessent told Fox Business on Thursday. Trump held a virtual meeting with the leaders of Germany, Finland, France, the UK, Italy, Poland, and the EU, as well as Ukraine's Vladimir Zelensky, ahead of his talks with Putin. Kiev's European backers sought to ensure the security interests of Ukraine and the EU are 'safeguarded in Alaska,' German Chancellor Friedrich Merz told journalists following the event. The group put forth five 'key points' they wanted Trump to follow during Friday's summit, according to Merz. Those included a demand for a ceasefire before any talks on a 'framework agreement,' as well as 'robust security guarantees' for Kiev. 'It is time for our European counterparts to put up or shut up,' Bessent said, commenting on the situation. 'They keep saying… the US should do this, the US should do that.' 'If we are going to have a united front… then I think that our European counterparts need to do their part,' the Treasury secretary said, pointing to the US secondary tariffs on India – a major importer of Russian oil. The EU did not follow Washington's example in this regard, Bessent said, pointing out that European companies are still buying Indian petroleum products. The US hiked tariffs on Indian goods up to 50% this month, citing the country's continued purchases of Russian oil. New Delhi has called the tariffs 'unfair, unjustified, and unreasonable,' and has vowed to protect its national interests. The EU and some of its member states have emerged as more hawkish supporters of Kiev since the US shifted towards a more diplomatic approach to resolving the Ukraine conflict under Trump. The Trump administration and Brussels have also engaged in mutual recriminations over how the burden of propping up Kiev should be shared.
Russia Today
13 hours ago
- Russia Today
China hits back at EU over Russia sanctions
Beijing has announced that it has blacklisted two banks in the EU, in response to the bloc targeting Chinese lenders as part of the latest package of Ukraine-related sanctions against Russia. Brussels introduced its 18th package of measures against Moscow last month, focusing on Russia's energy and banking sectors. It included restrictions against several entities and financial institutions based in China, India, the UAE, and Turkey, among other measures. According to a statement released by the Chinese Ministry of Commerce on Wednesday, Beijing has included Lithuania-based UAB Urbo and AB Mano in its countermeasure list, immediately banning Chinese organizations and individuals from transactions, cooperation, and other activities with them. It emphasized that the move taken by the EU authorities against the Chinese Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank is 'a serious violation of international law' that 'has caused significant harm to the legitimate rights and interests of Chinese companies.' The European Commission has pledged to review the measures introduced by Beijing in detail before taking further steps. The bloc 'is open to identifying a mutually acceptable solution that could ultimately lead to the de-listing of the banks,' Olof Gill, a spokesman at the European Commission, said on Wednesday, as cited by Bloomberg. Both Lithuanian banks released statements insisting that China's sanctions won't affect their operations. Urbo Bank said it has no business ties in China, while Mano Bank stated that China has never been a target market and that it does not operate there. Both banks said they had contacted Lithuanian authorities after the announcement. Beijing has refused to join the Western sanctions imposed on Moscow after the escalation of the Ukraine conflict in 2022. China has maintained close economic ties with Russia while repeatedly calling for a diplomatic resolution. In recent months, the West has stepped up efforts to target Russia's trading partners, including China, in an effort to isolate Russia and reduce its export revenues. Moscow has repeatedly condemned the Western sanctions as illegal and counterproductive, calling them a 'double-edged sword,' while stressing that Russia has developed a 'certain immunity' to them.
Russia Today
16 hours ago
- Russia Today
Indian farmers call for boycott of US products
Farmers groups in India have called for a boycott of certain US products over Washington's latest tariffs and demands for New Delhi to open up its agricultural market to American companies. Trade agreement negotiations between India and the US collapsed earlier this month, and Washington initially imposed 25% tariffs on Indian imports, before adding another 25% for the South Asian country's continued purchases of Russian oil. The second set of tariffs will be implemented from August 27. New Delhi has called the US tariffs 'unfair, unjustified, and unreasonable,' and has vowed to protect its national interests. 'No farmer should buy Coca-Cola. It's time to start having lemonade and buffalo milk at home,' a protesting farmer told RT at a tractor rally in Greater Noida, near Delhi. Indian Farmers React to #TrumpTariffs - "Ditch Coca-Cola"From the US-India FTA hinging on Modi's protection of the agricultural industry, to Washington's 50% tariffs hurting exports... RT tested the ground at a tractor rally in Greater Noida:"The US has never supported India,… 'Indian agricultural produce going to the US will fall under the 50% tariff regime. Due to this hike farmers will only get half the profit, and the US will get 50% more from import tax,' another farmer said. Indian Prime Minister Narendra Modi spoke up for the country's farmers. 'For us, our farmers' welfare is supreme,' he said last week. 'India will never compromise on the wellbeing of its farmers, dairy sector and fishermen. And I know personally I will have to pay a heavy price for it.' For over five months, Washington and New Delhi discussed a trade deal, but differences arose when the US reportedly asked for agricultural and dairy products to be exempted from tariffs. Agriculture and dairy are 'very big red lines' when it comes to trade talks with the US, Indian Finance Minister Nirmala Sitharaman said in June. Agriculture and its associated sectors is the largest source of livelihood in India. 70% of the country's rural households depend primarily on agriculture for their livelihood, with 82% of farmers being small and marginal, according to a report by the Food and Agricultural Organization of the United Nations. A US delegation is expected in India later this month for a fresh round of negotiations for a trade agreement.
