Trump's Potential Victory Threatens German Exports

The Ifo Institute has issued a warning that a victory for Donald Trump in the upcoming US elections could significantly damage German exports. The institute predicts a potential 14.9% decline in exports to the USA, particularly affecting the automotive and pharmaceutical sectors. This decline could be exacerbated by Trump's proposed tariffs: 60% on imports from China and 20% on imports from the rest of the world. These tariffs would make German products substantially more expensive in the US market, further hindering export volumes.

In August, German exports were already showing signs of weakening, with a 4.8% drop to 55.2 billion euros. Exports to the USA fell by 3.2% to 12.6 billion euros, while exports to China plummeted by 15.2% to 7 billion euros. This is concerning given that the USA and China were Germany's top trading partners in 2022, with trade volumes of 252 billion euros and 254 billion euros, respectively.

The Ifo Institute also warns that a potential trade war, especially with China, could further burden Germany's export-dependent economy. The ripple effects could lead to a 10% decrease in exports to China. This scenario doesn't even account for countermeasures from China and other nations, which could worsen the impact on German industries.

The automotive and pharmaceutical sectors are particularly vulnerable. A reduction in exports could lead to significant job losses in Germany, further destabilizing the economy. As Germany navigates an already challenging economic landscape, the potential repercussions of Trump's election victory could spell a severe downturn for one of the world's leading export nations.