US tariffs: German exports in danger – an economic earthquake is imminent!

US tariffs: German exports in danger – an economic earthquake is imminent!

The Federal Association of Wholesale and Foreign Trade (BGA) expresses massive concerns about the planned high US punitive tariffs on German exports. BGA President Dirk Jandura warns of the “enormous impact” that these measures could have on the competitiveness of German goods. The increased tariffs are likely to lead to price increases that will have to be passed on to customers, reducing the attractiveness of German products in international trade, Jandura said. The sectors particularly affected are pharmaceutical products, vehicles and vehicle parts, machines as well as medical technology, medical devices and electricity and measurement technology.

The exact impact of the tariffs is currently uncertain as US President Trump has only made an announcement. However, Jandura believes that the USA will also suffer from the high tariffs, as they could drive up inflation. U.S. policy developments are described as “erratic,” making a sudden wave of resettlement in the U.S. unlikely. Nevertheless, some companies are trying to expand their production capacities in the USA in order to avoid punitive tariffs.

Political reactions and warnings

The head of foreign trade at the DIHK, Volker Treier, described the tariff announcement as a “provocative about-face” and warned of the negative consequences for the world trade order. Treier calls for the EU to continue to be willing to engage in dialogue and warns of a potentially bad deal that could have long-term negative effects for Germany. In this context, Federal Economics Minister Katherina Reiche also criticized the high tariffs and emphasized the urgency of finding a negotiated solution with the USA. It points out that tariff disputes have no winners and reinforces the need to increase trade.

The city of Berlin could face significant economic challenges due to the threatened high US punitive tariffs, as these could place additional strain on exchanges between Europe and America. There are general fears that the tariff announcements are endangering not only prices, but also jobs and innovations in key industries in Germany.

Risk reduction strategies

In the wake of these developments, companies are analyzing the impact of tariffs and developing strategies to protect themselves. Important measures include reviewing supply contracts to take into account price change clauses and exclusive business relationships. The correct classification of goods is essential to identify possible exceptions to customs measures. Companies also create “what-if” scenarios to quantify the impact of tariffs under various conditions, including the possibility of building inventory or changing suppliers.

Another strategic approach involves reducing customs value by eliminating non-duty amounts. For this purpose, companies can, for example, use the “First Sale for Export” regulation. The establishment of tariff suspension regulations and the use of free trade zones in the USA as well as inward processing in the EU are also considered as possible options for action. These process adjustments are critical to dealing with the potential product range changes and trade barriers that the new tariffs could create.

In addition, the risk of EU countermeasures that could affect imports is being monitored, while reciprocal measures by other affected countries could also affect exports to Germany. The extent of these developments is of considerable importance both for the companies affected and for the entire German economy.

The concerns and assessments of Tixio and KPMG add up to an alarming picture that illustrates the urgency of strategic reactions and political negotiations.