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Reuters
27-03-2025
- Automotive
- Reuters
German auto shares seen lower after Trump announces 25% tariffs
BERLIN, March 27 (Reuters) - Shares in some German automakers and suppliers were indicated lower in pre-market trade on Thursday after U.S. President Donald announced 25% tariffs on imported vehicles, a move that threatens to hurt Germany's already struggling auto industry. Shares in BMW ( opens new tab were seen 2.3% lower and Daimler Truck ( opens new tab 1.9% lower, according to Lang & Schwarz pre-market data. Shares in parts supplier Continental ( opens new tab were seen 3.9% lower Germany's VDA car lobby slammed the new levies as a "fatal signal" for free, rules-based trade, warning that it would harm companies as well as global supply chains. "The German automotive industry is calling for immediate negotiations between the US and the EU on a bilateral agreement," VDA president Hildegard Mueller said in a statement. Still, research by the IfW economic institute found that Germany would not be the hardest-hit, the FAZ newspaper reported. The institute estimates that German gross domestic product will be 0.18% weaker in the first year after the introduction of the tariffs in real terms, compared with -1.81% in Mexico and -0.6% in Canada. "Overall, the export losses are limited, as cars are often produced close to the sales market," IfW trade economist Julian Hinz said in comments carried by FAZ.
Zawya
14-03-2025
- Business
- Zawya
Germany's fiscal expansion would boost GDP from 2026, DIW says
Germany's planned 500-billion-euro infrastructure fund could raise economic output by an average of more than two percentage points per year over the next 10 years, Germany's DIW economic institute said on Friday. German chancellor-in-waiting Friedrich Merz was set to make a last-ditch attempt on Friday to convince the Greens of his plans for a massive increase in state borrowing to bolster defence and infrastructure. DIW, one of Germany's main economic forecasters, cut its forecasts for Europe's largest economy on Friday for this year and next due to political uncertainty and global trade tensions. Next year, gross domestic product will likely increase by 1.1%, down from the DIW's December forecast of 1.2%, the institute said. This forecast does not take into account defence and infrastructure expenditures. If a defence and infrastructure spending ramp-up is included, growth of 2.1% is expected in 2026, DIW said. The institute expects the economy to stagnate this year, revising its previous forecast for 0.2% growth. This is because the fiscal expansion would not have any impact in the current year. One reason for the downward revision is private consumption, which is developing more weakly than expected in Germany despite rising real wages, DIW said. Many people in Germany are holding back on major purchases due to the tense global political situation and job security concerns, it added. The IfW institute revised up its 2026 estimate for Germany, predicting 1.5% growth off the back of the expected boom in public spending. Like the DIW, it also expects a stagnation this year. In 2024, Germany became the only G7 country to post a contraction for two consecutive years. Strengthening public investment and reducing economic uncertainty should be a top priority for the new German government, said DIW president Marcel Fratzscher on Friday in the presentation of the new forecasts. "Although special funds are not the ideal solution, they could offer a pragmatic approach to compensate for Germany's investment weakness and pull the German economy out of the crisis," Fratzscher said. Merz has justified the need to push the constitutional amendments through the outgoing parliament with the recent shift in policy in the United States under President Donald Trump, warning that a hostile Russia and an unreliable U.S. could leave the continent exposed. "The loss of the U.S. as a reliable political partner poses major challenges for the future German government and exacerbates the already difficult situation, especially for export-oriented companies," said Dany-Knedlik.
Reuters
11-02-2025
- Business
- Reuters
Germany's trade surplus with US reaches new record
BERLIN, Feb 11 (Reuters) - Germany's trade surplus with the United States reached a record level, data from the statistics office showed, as countries wait to learn how U.S. President Donald Trump will impose tariffs on imported goods. Germany's trade surplus with the U.S. expanded to 70 billion euros ($72 billion) in 2024, well above the previous record of 63.3 billion euros reported for the full year 2023. "It would be hard to imagine worse timing," said Holger Goerg, from the Kiel Institute for the World Economy (IfW). Trump substantially raised tariffs on steel and aluminum imports on Monday to a flat 25% "without exceptions or exemptions". German Chancellor Olaf Scholz said in response the European Union was still awaiting formal notice of any new tariffs but that any such move would be met with retaliatory measures. The increase in trade surpluses could reverse, Goerg said, if Trump imposed new tariffs on German imports, a measure the U.S. president says would boost U.S. manufacturing. Germany, Europe's biggest economy, was last year the only G7 country posting a contraction for two consecutive years and a trade conflict with the U.S., its main trading partner, would deliver a big hit to output. German exports to the U.S., led by cars and pharmaceutical goods, increased by 2.2% year-on-year to a record 161.3 billion euros in 2024, consolidating the U.S. position as the top buyer of goods "Made in Germany". Imports from the U.S. fell by 3.4% to 91.4 billion euros last year. Goerg said the U.S. trade deficit reflected a lack of international competitiveness of U.S. goods which will not be solved by tariffs. "On the contrary, I would assume that this would have a negative impact on the U.S. export performance," Goerg said. The situation is completely different in trade in services, where the U.S. has a strong export surplus, including to the EU and Germany, he noted. "Mr. Trump should include that in his calculations," Goerg said.
