Overview
- Ifo’s latest assessment finds the tariffs constitute a durable shock despite the 2025 EU–US deal that set most EU imports to the U.S. at 15%.
- The institute projects mid-term export declines of roughly 15% to the U.S. and about 8% to China as demand weakens and trade shifts.
- The hit comes via three channels: reduced U.S. sales, softer Chinese demand for German goods, and increased Chinese competition in Europe.
- An Ifo survey reports 30% of firms with planned U.S. investments delayed projects and 15% canceled them due to trade-policy uncertainty.
- Manufacturing bears the brunt, with autos, machinery and pharmaceuticals comprising about 60% of German exports to the U.S., while services and parts of agriculture face limited direct effects.