Unmasking the Job Threat: Germany's Industrial Sectors in the Crosshairs of US-China Trade War
Escalating U.S.-China trade tariffs pose potential threat to German employment
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With a looming trade war between the US and China, the German job market may find itself in hot water, as per a study. In the absence of a truce in the ongoing tariff skirmish, Chinese exporters might eye European markets, particularly Germany, according to an analysis by credit insurer Allianz Trade [1].
Jasmin Groeschl, Allianz Trade economist, explains the potential risk, stating, "Around 17,000 to 25,000 industrial jobs in Germany could take a hit due to increased competition from Chinese goods diverted from the US market" [1].
Industries like mechanical engineering, textiles, non-metallic mineral products, electronics, computers, and motor vehicles would bear the brunt of the storm. These sectors account for roughly 0.2 to 0.3 percent of the total industrial employment in Germany, which stands at around eight million people [1].
It's the manufacturing sector and southern Germany, namely Upper Franconia, Tubingen, and the Freiburg region, that could witness the most substantial job losses [1]. In sectors like machinery and equipment, about 13,000 to 19,000 jobs could be lost, while 1,200 to 1,800 jobs might be at stake in the non-metallic mineral products sector, and around 2,200 to 3,300 jobs could be in jeopardy within the textile industry.
But this isn't just about job losses - it's also about industries. The automotive sector, particularly, could face a significant blow, as tariffs could result in fewer cars being produced globally. The decline in production would hit the workforce hard [2].
Companies are becoming increasingly restless and are rethinking their supply chain strategies due to the trade conflict-induced supply chain disruptions. A major German automotive supplier, Mahle, is contemplating re-routing its supply chains, but the volatile US market makes them hesitant to invest [2].
The economic stress and uncertainty caused by these tariffs could lead to rocky waters for the German job market. Add to that the EU's planned ban on new combustion engines by 2035, which might further impact automotive sector giants like Mahle [2].
While specific data linking job losses directly to the US-China tariff conflict isn't extensive, the global trade tensions and the move towards electric mobility are critical factors that might influence the workforce's stability in affected sectors.
Source: ntv.de and rts
Insider Info:
- The automotive industry could face a significant reduction in global car production due to the US-China tariffs, potentially losing at least 1.5 million cars produced in 2025[2].
- Suppliers like Mahle are considering rerouting their supply chains to mitigate the fallout, but they're cautious about investing in the US due to market volatility[2].
- The uncertainty and economic stress caused by these tariffs and the EU's move towards electric mobility could lead to job insecurity in the affected industries[2].
[1] ntv.de, rts[2] Reuters (accessed on June 20, 2021)
- The study predicts that up to 25,000 industrial jobs in Germany could be affected due to increased competition from Chinese goods diverted from the US market, particularly in sectors like mechanical engineering, textiles, electronics, computers, motor vehicles, non-metallic mineral products, and more.
- It's been suggested that the manufacturing sector and southern Germany, specifically Upper Franconia, Tubingen, and the Freiburg region, could experience the most significant job losses, with industries like machinery and equipment, non-metallic mineral products, and textiles at risk.
- The looming trade war between the US and China might have a significant impact on the automotive sector, potentially leading to a reduction in global car production and job losses, as indicated by the insider info.
- Companies are reevaluating their supply chain strategies due to the trade conflict-induced supply chain disruptions, with some, like Mahle, contemplating re-routing their supply chains, but hesitant due to the volatile US market.
