Collapsing Exports Due to Trump's Imposed Tariffs
In July 2022, Germany's exports showed a mixed performance, with some sectors experiencing growth while others faced challenges, according to the latest industry figures.
Preliminary results indicate that goods worth 130.2 billion euros were exported abroad in July, marking a 0.6% decrease from June but a 1.4% increase compared to the same month last year. Notably, deliveries to Eurozone partner countries increased by 2.5% to a volume of 52 billion euros.
However, exports to the USA reached their lowest level since December 2021. The goods value of German exports to the USA in July was 11.1 billion euros, a 7.9% decrease from June and a 14.1% decrease from a year ago. This decline can be attributed, in part, to the tariffs on steel and aluminum that President Donald Trump increased to 50 percent at the beginning of June.
The weak July figures for order intake cloud the outlook for further development in industrial production. Despite this, German industrial production started the third quarter with a plus, mainly due to an increase in machinery production.
The government's measures to support domestic investments through faster depreciation only came into effect at the end of July. Thomas Gitzel, chief economist of VP Bank, wrote that the increase in industrial production gives hope that industry will again contribute positively to growth in the third quarter.
Business with China and the United Kingdom deteriorated for Germany's exporters in July. On the other hand, new export markets are showing growth and offering hope for less severe losses for German exporters. These include Poland, where exports increased by 5.7% in the first half of 2025, and emerging opportunities in Mercosur countries, such as Brazil, Argentina, Uruguay, and Paraguay, supported by the EU-Mercosur agreement. Additionally, growth impulses are expected from markets outside Europe, such as India, particularly for tech industries benefiting from new free trade agreements.
The trade dispute between the USA and China remains unresolved, and since August 7, most imports from the European Union to the USA have been subject to tariffs of 15 percent. Dirk Jandura, president of the Federal Association of Wholesale, Foreign Trade, and Services (BGA), stated that the fourth consecutive decline in exports to the USA shows the impact of the US trade policy on German exporters.
The Federal Statistical Office revised its data for June, showing only a 0.1% decrease in production compared to the previous month, rather than the initially calculated 1.9% decrease. Klaus Wohlrabe, head of Ifo surveys, commented that disillusionment is spreading in the export industry due to the US trade policies.
These latest figures from the industry have further fueled hopes of at least a cyclical recovery. However, it is important to note that production is still more than 10 percent below the level of the years before the Corona pandemic.
In conclusion, while Germany's export performance in July 2022 showed some positive signs, challenges remain, particularly in relation to the ongoing trade disputes with the USA and China. The government's recent measures to support domestic investments and the potential for growth in new export markets offer a glimmer of hope for the future.
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