According to the Ifo Institute, a victory for Donald Trump in the US presidential election in November would be bad news for German industry.
According to calculations by the Ifo Institute, a victory by Donald Trump in the US presidential election in November would be the next piece of bad news for the beleaguered German industry. If Trump were to return to the White House and implement his election promise of higher import tariffs, German exports to the USA could fall by almost 15 percent, estimate economists from the Ifo Institute and Econpol Europe in one scenario. The automotive and pharmaceutical industries would be hit particularly hard, with export losses of just under a third and over a third respectively. According to the scientists’ calculations, German exports to China would also suffer as a knock-on effect, falling by almost ten percent.
Trump has announced a tariff of 60 percent on US imports from China and 20 percent on imports from the rest of the world. This would make German products significantly more expensive in the USA. According to Ifo and Econpol, the much higher tariffs on Chinese goods would have an indirect knock-on effect of reducing demand from Chinese industry. “If Trump is re-elected and starts a new trade war with China, Germany as an export nation would suffer greatly,” said Ifo trade expert Lisandra Flach.
For their calculations, Flach and her co-authors calculated the immediate impact of US tariff increases. Expected countermeasures by China and other nations are not included. In this case, the negative impact on Germany would be significantly greater, according to Ifo.
Source: Stern
