Trump back in the White House: Is Germany threatened with economic collapse?

Trump back in the White House: Is Germany threatened with economic collapse?

Donald Trump is back in the White House! The 2024 US election has produced a clear winner, and this could turn not only the American but also the German economy upside down. His victory over Kamala Harris has already made waves, and the consequences are alarming. According to a report by finance.net Trump's aggressive economic policy, which he announced during the election campaign, will put pressure on the German export industry.

The USA is one of Germany's most important trading partners, and its dependence on the new president's political decisions is enormous. In 2023, Germany exported goods worth 157.9 billion euros to the United States, accounting for about 9.9 percent of total exports. This dependence could prove dangerous, especially if Trump's plans to increase import tariffs become a reality.

The threat of a tariff increase

Trump has announced that he will impose tariffs of up to 60 percent on imports from China and 20 percent on products from the rest of the world. The Ifo Institute warns that this could lead to a decline in German exports of up to 15 percent, particularly in key sectors such as the automotive and pharmaceutical industries. These sectors are crucial to the German economy and a decline could have catastrophic consequences.

The tariff increase could also reduce Chinese industry demand for German products, leading to further export losses. According to estimates, Germany could lose up to 35 billion euros due to the increased tariffs. The economic ties between the USA, Germany and China are complex and the effects could be far-reaching.

Trade war in sight?

The possibility of a trade war between the US and China is real. Trump's tariff policy could force Germany to follow the US, which would further inflame tensions. A trade war would not only have negative effects on the German economy, but could also destabilize global supply chains. Experts warn that German industry could be in the crossfire, especially if Trump wants to encourage US companies to return to the US through tax incentives.

The car manufacturers VW and BMW, which have production facilities in Mexico, are under pressure to relocate their production to the USA to avoid high punitive tariffs. This could lead to an increase in unemployment in Germany and endanger economic stability.

Stock market under pressure

The uncertainty that Trump's policies bring with them could also destabilize the German stock market. Allianz Global Investors warns that a divided government under Trump could tighten budget restrictions, which would negatively impact foreign stocks. The announced tariffs could shake investor confidence and endanger the competitiveness of German exporters.

Additionally, political instability in the US could weaken the dollar, which would drive up the prices of German products on the US market. This would put a significant strain on trade between Germany and the USA and could lead to a decline in exports.

The coming months will be crucial to see how the political environment develops under Trump. Experts agree that the challenges posed by Trump's economic policies and geopolitical tensions cannot be underestimated. According to an analysis by the Center for European Economic Research (ZEW), only seven percent of 189 financial market experts surveyed believe that Trump's presidency will have a positive impact on Germany's gross domestic product by 2025 finance.net reported.

The return of Donald Trump to the White House could not only change the political landscape in the USA, but also have a significant impact on economic conditions in Germany. Time will tell how Germany responds to these challenges and what measures will be taken to stabilize economic relations.