US tariffs: How badly are German industry exports suffering?

On average across all sectors, German exports to the U.S. fell by 7.8 percent during this period, whereas in the comparable timeframe from 2016 to 2024 they had still grown by nearly 5 percent on average. German exports of motor vehicles and parts, machinery, and chemical products—together accounting for more than two-fifths of German exports to the U.S.—are particularly hard hit. Combined, these three sectors alone have dragged Germany’s exports to the U.S. down by over 5.2 percentage points compared to the previous year, representing more than two-thirds of the overall decline in German exports to the U.S.

The relatively high tariff burden on motor vehicles and parts until the tariff agreement between the EU and the U.S. in August 2025 likely contributed significantly to the sharp drop of 14 percent in German automotive exports to the U.S. compared to the previous year. German machinery exports to the U.S. are partially also subject to a substantially higher tariff rate of 50 percent, which applies to steel, aluminium, and related products. Accordingly, German machinery exports to the U.S. fell by 9.5 percent in the first three quarters of 2025. For metals, stronger front-loading effects in the first quarter explain the initial increase in exports, while subsequent quarters saw declines. For pharmaceutical and similar products, front-loading and possible diversion effects also help explain export growth, as these goods were exempt from U.S. import tariffs for longer than other products (and some remain exempt even now). In key sectors, German exports to the U.S. have thus been pushed back to levels seen in 2022 or even early 2019. Without the significant upswing in German exports to the U.S. following the COVID-19 pandemic until Donald Trump’s re-election in fall 2024, the downturn would have been even more painful.

Since U.S. import tariffs are unlikely to return to previous levels anytime soon, the development in the third quarter of 2025 may represent an approximation of the “new normal” for German exports to the U.S. This hits the already pressured German export model hard. This can be seen, for example, in the fact that the development of German exports to the US has depressed the development of Germany's global exports by 0.81 percentage points, whereas last year they still made a positive contribution to Germany’s global export.

The development of German exports to the U.S. has a significant impact on global exports for certain sectors. For motor vehicles and parts, the negative development in exports to the U.S. accounts for nearly half of the global export decline. Losses in the U.S. market are also a key factor behind the overall 3.3 percent drop in German machinery exports worldwide. To a somewhat lesser extent, this also applies to chemical products.