German exports to U.S. plunge in May as tariff pause nears expiry
Data released Tuesday by the Federal Statistical Office showed that exports to the United States slumped by 13.8 percent year-on-year. On a monthly basis, shipments fell by 7.7 percent, marking the lowest level since March 2022.
Although the United States remains Germany's largest single export market, its share has been shrinking amid ongoing trade tensions. Imports from the United States also decreased in May, falling 10.7 percent from April, pointing to a broader weakening in bilateral trade flows.
The data comes just ahead of a looming deadline for potential punitive tariffs from Washington. In April, the U.S. administration announced the introduction of so-called "reciprocal tariffs" on imports from the European Union (EU). Initially scheduled for implementation on July 9, the measures were later postponed to Aug. 1.
Currently, the United States levies 25 percent tariffs on European cars and car parts, and 50 percent on steel and aluminum products, raising concerns among exporters.
Germany's ifo Institute reported that export expectations among German companies weakened further in June, with its outlook index falling to -3.9 points from -3 points in May.
"The tariff threats from the U.S. are still on the table," said Klaus Wohlrabe, head of surveys at ifo. "An agreement between the EU and the U.S. has yet to be reached, and this uncertainty is lowering exporters' expectations."
Overall, Germany's exports declined by 1.4 percent month-on-month in May, the statistics office said.
Carsten Brzeski, global head of Macro for ING Research, said German exports continue to face significant headwinds. "The risk of further tariffs hangs like a sword of Damocles over German and European exporters," he noted, adding that the strengthening euro against the U.S. dollar also adds to the concerns.
Brzeski warned that trade uncertainty and currency pressure could further increase the risk of stagnation or even contraction of the German economy in the second quarter.
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