ifo Institute / EconPol Europe: Germany’s US exports could fall by 14.9% if Trump is re-elected

If Donald Trump wins the US presidential election, German exports to the United States could fall by 14.9%. German car exports to the United States would be particularly hard hit, down 32%, as would pharmaceutical exports, down 35%. German exports to China could decline by almost 9.6% overall. This has been shown by simulations by the ifo Institute and EconPol Europe in the event that Trump implements his election campaign promises to introduce new tariffs. This scenario includes tariffs imposed by the United States of 60% on goods from China and of 20% on goods from all other countries. “If Trump is re-elected and starts a new trade war with China, Germany, as an exporting nation, would suffer greatly,” says ifo trade expert Lisandra Flach. 

At the same time, extensive US tariffs could boost German exports to Canada (3.3%), Mexico (3.1%) and within the EU (0.4%), while German exports to the rest of the world would hardly change (down 0.2%). Overall, German exports could decline by around 2%. This would correspond to a reduction in German exports of 35 billion euros (at 2023 prices). The largest export losses would be recorded by the German automotive industry (down 4.9%) and the pharmaceutical industry (down 4.7%).

US tariffs on China would also adversely affect Chinese demand for intermediate products from Germany. This is one of the reasons for the sharp decline in German exports to China in the event of US tariffs. “Our calculations are based on unilateral trade tariffs imposed by the United States, as announced by Trump during the election campaign. If other countries, such as China, were to impose retaliatory tariffs in response, the negative impact on Germany would be significantly greater,” says ifo researcher Andreas Baur.