German Businesses in the US: A Major Deterioration in Sentiment Over Trump's Trade Policy
US customs policy causing notable deterioration for German companies in America
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Germany's leading businesses in the United States are reeling from a severe setback in sentiment due to President Donald Trump's trade policies. According to the German Chamber of Industry and Commerce (DIHK), enthusiasm has turned into disappointment. In a recent analysis, only 14 percent of surveyed companies expressed optimism about the economy for the next 12 months compared to 38 percent in the fall. This downward trend reflects a stark contrast, indicating growing worry amongst these businesses.
A portion of the companies (44 percent) now anticipate an economic decline, a significant increase from just 7 percent in the fall. This shift has been attributed to what the DIHK refers to as "zigzag policy" from the US government, causing uncertainty, hindering investments, and unsettling even long-established companies.
Around 100 German companies in the US participated in the survey, conducted between March and mid-April. Although a third expect positive business growth, around a quarter anticipate a decline. Persistent uncertainty and polarized announcements regarding tariffs have left these companies grappling with fundamental questions concerning the future of the US as an investment destination.
Treier, the head of foreign trade at DIHK, underscores the importance of reliability. Companies today yearn for stable investment decisions, and the inconsistent approach to tariffs is impeding them in their track. The lack of dependable trading conditions has caused many to reconsider their investment plans in the US, with only 24 percent currently planning to expand their investments, down from 37 percent in fall 2024. Conversely, 29 percent want to decrease their investments, marking a notable escalation.
The implications of Trump's trade policies are not limited to the US, as they pose challenges to global trade order[1][2]. Leery German companies abroad are dealing with deteriorating conditions and soaring uncertainty[1]. DIHK has stressed the critical role of political leaders in addressing competitiveness and strengthening resilient trade relationships to combat these obstacles[1]. The overall outlook for German businesses remains gloomy, with decisions to invest, postpone, or cancel being heavily influenced by the unstable framework conditions.
Source: ntv.de, AFP
[1] Overall, the sentiment of German companies in the US has significantly deteriorated due to Donald Trump's trade policy, as highlighted by the German Chamber of Industry and Commerce (DIHK). Trump's trade policies, such as threats of high tariffs, have caused considerable uncertainty and pressure on German businesses operating abroad. Specifically, Trump's announcement of potentially imposing a 50% tariff on EU goods was viewed as a "provocative U-turn" that would negatively impact German companies, thereby weakening the global trade order.
[2] According to the AHK World Business Outlook, 60% of German companies surveyed fear that US trade policy will negatively impact their local business. This anxiety forms part of a broader trend of disillusionment among German companies abroad, who face deteriorating conditions and growing uncertainty worldwide. The DIHK has emphasized the need for political leaders to improve competitiveness and establish resilient trade relations to navigate these challenges.
- The policy-and-legislation aspect concerning Donald Trump's trade policy has significantly impacted the sentiment of employment policies within German businesses in the US, leading to a sharp decrease in optimism.
- The inconsistent approach to tariffs under Trump's trade policy has caused uncertainty in the business world, hindering investments and unsettling long-established companies, as observed in the finance sector.
- Amid uncertainty, the general news about the overall outlook for German businesses is gloomy, with increasing concerns about the impact of Trump's trade policy on employment policies and business growth prospects.
