US elections
How financial markets and economists react to the US election
Trump wins the US presidential election. There are also great concerns in Germany as an export nation because of fears about trade barriers, and the German stock market is initially looking up.
A second term in office for Donald Trump is causing concern for the German economy and at the same time boosting stock markets. The export nation Germany is particularly concerned about tariffs, which the Republicans announced during the election campaign to protect the US economy. An overview of the reactions:
Industry and foreign traders warn of trade restrictions
German industry is concerned about Trump’s return to the White House. “Across-the-board tariffs of ten or even 20 percent on all imports and 60 percent on imports from China would massively damage not only Germany and the EU, but also the US economy,” said the Federation of German Industries (BDI).
“The world needs fewer, not more, trade restrictions,” emphasized the President of the BGA foreign trade association, Dirk Jandura. The USA is Germany’s most important trading partner and most important ally in a time of global upheaval. “We are counting on a continuation of the traditionally good transatlantic relations.”
The President of the German Chamber of Commerce and Industry (DIHK), Peter Adrian, emphasized: “If Trump introduces a general import tariff, this would be a major setback for the German economy.” Many companies were also worried about the US’s tougher approach to China. A trade conflict between Germany’s most important trading partners would be a further burden on international business.
Economists fear escalation and less growth
Economists expect that Trump could initially only impose selective, headline-grabbing tariffs next year and threaten further measures. “In isolation, such an escalation in trade tensions could result in us lowering our 2025 growth forecast for Germany (currently 0.5 percent) by around 0.2 percentage points and our forecasts for other European countries by around 0.1 percentage points,” said the economists at Berenberg Bank.
If the USA actually imposed a tariff of ten percent on all imports from Europe, the damage could be even greater. Commerzbank’s chief economist, Jörg Krämer, also explained: “The tariffs not only make German goods more expensive in the USA, but are also likely to lead to counter-tariffs from the EU, which would further burden foreign trade.”
According to the German Economic Institute, which is close to employers, the “worst case scenario” has occurred. It predicts a “trade war” that could cost the German economy up to 180 billion euros in four years.
The President of the Kiel Institute for the World Economy (IfW), Moritz Schularick, also viewed a Trump victory as negative. This “begins the most difficult economic moment in the history of the Federal Republic, because in addition to the internal structural crisis, we are now faced with massive foreign trade and security policy challenges that we are not prepared for.”
Dax with profits – losses on stock exchanges in China
Trump’s triumph has now led to significant profits on the Frankfurt Stock Exchange. The German leading index Dax lost a large part around midday and only gained 0.3 percent to 19,320 points.
While there were clear gains on the US stock markets, the larger Asian stock markets reacted differently: Japan went up, the Chinese stock exchanges recorded losses. “China is Trump’s favorite target for higher tariffs,” said fund manager Thomas Altmann from asset manager QC Partners.
Auto stocks in the red, Trump friend Musk’s Tesla with a strong plus
The automotive sector is a clear loser in German stock trading. With discounts of between four and six percent, Mercedes-Benz, Volkswagen, BMW and Porsche were at the bottom of the Dax at midday.
The Association of the Automotive Industry (VDA) pointed out that German manufacturers produced more vehicles in the USA last year than ever before. In the first half of this year, the country was also the most important buyer of German car exports. VDA President Hildegard Müller emphasized that relations with the USA are very important for the German automotive industry. “Any change in the framework conditions can have an impact on the economic situation of the industry and thus also on employment in Germany, but also in the USA.”
For Tesla investors, Trump’s election victory is a celebration – after all, Elon Musk, major shareholder and boss of the electric car manufacturer, is a big supporter of Donald Trump. Tesla shares rose by 15 percent premarket – in absolute terms, that’s almost $120 billion.
Renewable energy stocks under pressure
Trump is known as a supporter of conventional energy sources and had already announced as a presidential candidate that he would produce as much oil as possible if he were elected. He is considered an opponent of climate policy. Subsidies for green energy could be scaled back under Trump. This also put a strain on this sector in Germany.
Cryptocurrency on the rise
Trump was the favorite of the majority of the crypto community. After the US elections, Bitcoin rose to a record high of just over $75,000. On the Bitstamp platform, the price climbed to $75,080 after the polls closed. The oldest and best-known digital money has never been so expensive. Bitcoin reached its previous all-time high on March 13, 2024 with a price of $73,738.
Oil prices fall – Strong dollar weighed after US elections
Oil prices initially fell. The US dollar reacted to another Trump presidency with gains, which slowed demand for crude oil. Since crude oil is usually traded in dollars on the world market, gains in the American currency make the raw material more expensive in countries outside the dollar area.
dpa
Source: Stern
