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U.S. imports experience significant decline

Stick leaves behind imprints

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Exports from Germany hit a low not seen since October, as reported in April.
Exports from Germany hit a low not seen since October, as reported in April.

A Sharp Decline in German Exports to the USA: What's Next?

U.S. imports experience significant decline

The trade war with the USA has taken a toll on the German export market, as revealed in April's figures. Companies shipped goods worth a staggering 131.1 billion euros abroad in April, marking a 1.7% drop compared to March this year and a 2.1% decrease compared to April 2024. The lingering question is: where do we go from here? The mood is escalating.

Trade ties with the USA have weakened noticeably, as preliminary statistics from the Federal Statistical Office disclose. Although the lion's share of German exports still heads to the United States, their amount in April 2025 hit the lowest since October 2024, amounting to 13 billion euros. Exports to the USA saw a 6.3% decline compared to April 2024, when adjusting for calendar-related and seasonal fluctuations.

Let's Talk Economics How Punitive are New US Tariffs? Where Does Germany Export Steel and Aluminum? German exports displayed an increase in the first quarter due to the anticipated harsher trade policies by US President Donald Trump. According to Wiesbaden statisticians, there was a slight 0.2% uptick in Germany's exports from January to April.

At the start of April, Trump unleashed his XXL tariff package. As of now, there is no fundamental agreement between the USA and the European Union on the extent of mutual tariffs. Recently, Washington has grown more aggressive, as Trump ordered a doubling of steel and aluminum tariffs' import tax.

Exports to the EU Increase, Third-Party Countries Feel the Crunch

In April, goods worth 72.9 billion euros were shipped to EU member states. This represented a 0.9% increase compared to March on a calendar- and seasonally-adjusted basis. On the other hand, exports to countries outside the EU experienced a 4.8% decrease, reaching goods worth 58.1 billion euros during the same timeframe.

The value of imported goods went up by 3.9% compared to the previous month. On a year-to-date basis, this figure also showed an increase of 3.8%. A total of goods worth 116.5 billion euros were brought into Germany in April, and the trade surplus was recorded as 14.6 billion euros.

Lingering Trade Pressure: Implications of Heftier US Tariffs

The recent escalation of US tariffs on steel and aluminum to 50% is predicted to significantly impact German exports:

  1. Financial Pinch: The tariffs will likely reduce German exports of these metals to the USA, potentially leading to losses in revenue for the industries depending on these exports. There may be repercussions for employment levels and production efficiency in the sector.
  2. Trade Escalation: In response to the augmented tariffs, the EU may initiate countermeasures, such as additional imports taxes on US goods. This could exacerbate trade tensions between the USA and the EU, adversely affecting German exports indirectly.
  3. Supply Chain Disruption: The tariffs could disrupt global supply chains, causing variations in prices and availability of steel and aluminum. German manufacturers might need to locate alternative markets or adjust their pricing plans.

Expected Future Relationship Between USA and Germany

  1. Negotiations and Countermeasures: The EU is actively engaging in negotiations with the USA to resolve trade disputes. If these negotiations prove futile, the EU may enact countermeasures, such as tariffs on US goods like aircraft, automobiles, and medical devices[1]. This could intensify trade tensions further.
  2. Diversification Strategies: German exporters might choose to focus on expanding their markets, seeking trade prospects in other regions as a means to minimize the impact of US tariffs.
  3. Future Trade Agreements: Ongoing discussions revolve around potential trade agreements or existing ones' modifications. Any future agreements could help restore normal trade relations and potentially reduce tariffs, providing advantages for German exports.

All in all, the increased tariffs are likely to complicate trade relations between the USA and Germany, although challenges may create opportunities for strategic adaptations in trade policies.

[1] https://www.euractiv.com/sections/trade-society/us-trade-tariffs-could-trigger-eu-countermeasures-against-airplanes-cars-3502445

  1. The community policy should address the economic impacts of the trade war between Germany and the USA, particularly the repercussions of increased US tariffs on German exports.
  2. In the employment policy, it's crucial to consider the effects of these tariffs on industries such as steel and aluminum, which may lead to changes in employment levels and production efficiency.
  3. The escalating trade tensions might prompt the EU to implement countermeasures, such as tariffs on US goods, which could have far-reaching consequences for various sectors within the finance and business industry.
  4. As political negotiations between the USA and the EU continue, it's essential to monitor policy-and-legislation developments and general news related to trade relations to see how they might affect German exports and the overall economy.

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