German exports: glimmer of hope despite customs conflict!

German exports: glimmer of hope despite customs conflict!

The German export industry is more optimistic for the coming months. The export expectations index rose to minus 3.0 points in May from minus 9.4 points in April, resulting in noticeable relief for exporters. This positive turnaround is partly attributed to the easing of the tariff conflict with the US government, which is giving companies confidence. However, Klaus Wohlrabe, the head of the Ifo survey, warns that a fundamental agreement between the USA and the EU on tariffs is still pending, which will allow uncertainty to persist.

The mood in the important industrial sectors, automotive and mechanical engineering, has also improved slightly. In the automotive sector, industry expects minus 0.8 points, while mechanical engineering is somewhat less optimistic at minus 1.1 points. Despite the partly positive developments, it should be noted that the overall indicator for all industrial sectors has been consistently below zero in 2024 and so far in 2025. In April, export expectations fell to one of the worst levels since the 2008/2009 financial crisis.

Influence of customs policy

The threatened tariff increases by the US government have contributed significantly to the pessimistic mood in the export industry. This uncertainty led many companies to lower their expectations regarding foreign business. The Ifo survey surveys several thousand companies every month to get a current picture of export conditions in Germany.

However, the recovery of the export expectations index should be seen as a positive signal, even if the challenges still exist. The companies hope for a stabilization of trade relations, especially between the EU and the USA, in order to avoid a further deterioration in the export situation.

In summary, although the export industry is not without its challenges amid global trade tensions, it is at least seeing a small glimmer of hope. It therefore remains to be seen how the trading landscape will develop in the coming months.

For more information, read the full analysis South Germans or Stock market news.