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Trade crisis with the USA: German exports in danger!
The German Business Panel report highlights the mixed situation of the German economy in April 2025 and the impact of planned US tariffs.
Trade crisis with the USA: German exports in danger!
Current data from the German Business Panel (GBP) indicate a mixed assessment of the German economic situation. A report from April 16, 2025 shows that the coalition agreement between the CDU/CSU and SPD has caused cautious optimism among companies. At the same time, however, recent announcements of increased US tariffs on certain products have weighed on business expectations, particularly in export-heavy industries. The rate of companies expecting to continue operating rose from 82.1% in October 2024 to 87.0% in March 2025, but fell to 85.1% after the tariff measures were announced.
The report highlights that the US markets are currently of utmost importance for the German economy. German exports to the USA amounted to an impressive 161.3 billion euros in 2024, making up 10.4 percent of all German exports. This is the highest proportion in 20 years. The pharmaceutical industry, medical technology, vehicle construction and mechanical engineering sectors are particularly affected by the announced tariff measures, as they are heavily dependent on the US markets.
Economic forecasts and investments
Before the coalition agreement, expectations for sales and profits had increased, with forecast sales growing by 1.2 percentage points, while profits increased by 1.9 percent. In fact, companies in manufacturing saw their investment expectations decline by 9.5 percentage points and in retail by around 3 points. Nevertheless, less export-oriented sectors such as construction and housing are showing increasing investment intentions.
Due to the uncertainty in the business situation, many companies have postponed their investments or relocated production. The rising material costs (+2.7 percentage points), administrative costs (+2.9) and energy cost forecasts (+1.9) are direct consequences of the tariff announcements. Export-oriented companies are particularly affected, as they have to reckon with rising procurement costs as well as uncertain supply chains and reduced bureaucracy.
Trade relations with the USA
The shift in trade relations has also produced some interesting numbers. In 2024, 23.8 percent of all German pharmaceutical exports, worth 27.0 billion euros, went to the USA. Other significant export figures include:
| Product category | Share of exports to the USA | Value (in billion euros) |
|---|---|---|
| Pharmaceuticals | 23.8% | 27.0 |
| Aircraft and spacecraft | 17.1% | 5.8 |
| Optical and photographic products | 14.9% | 11.8 |
| Motor vehicles and land vehicles | 13.0% | 34.0 |
| machines | 12.6% | 31.8 |
In addition, 34.4 percent of exported immunological products and 25.6 percent of exported engines and gas turbines were delivered to the USA. With a total foreign trade turnover of 252.8 billion euros, the USA was Germany's most important trading partner in 2024, followed by China with 246.3 billion euros. While trade with the USA increased by 0.1 percent, trade with China fell by 3.1 percent.
Head of study Prof. Dr. Rostam-Afshar emphasizes the need for political measures to address the global uncertainties that are impacting the German economy. The German Business Panel surveys more than 800 companies every month about their situation as well as changes in sales, profits and investments. Background information on the GBP is available as part of the Accounting for Transparency research project.