German corporations hunker down as Trump marks one yr in workplace | EUROtoday

The first yr of Donald Trump’s second time period has been something however calm amid a flurry of government orders by the US president focusing on alleged “opponents” at residence and overseas, and negatively affecting transatlantic commerce and enterprise.

Trump’s so-called Liberation Day announcement of “reciprocal tariffs” final April shocked governments and firms alike the world over, as did his crackdown on company range, equality and inclusion (DEI) initiatives.

German firms working within the United States, for instance, are actually questioning whether or not they can preserve their range or equality packages amid Trump’s “anti-woke” push that seeks to punish firms for a progressive staffing coverage.

At the identical time, nonetheless, the previous yr has proven that not each want of Trump wanted to be carried out, as even unfulfilled threats have served their goal of unsettling rivals and strengthening US negotiating positions.

But how precisely are Trump’s bullying techniques affecting German firms, and are they robust sufficient to face up to the stress?

American jobs at stake

According to the German Chambers of Commerce Abroad (AHK), which represents German enterprise pursuits abroad, the temper amongst German corporations within the US “remains tense,” with the commerce group saying in its World Business Outlook Fall 2025 that Trump’s tariff threats rank among the many “biggest burdens” to their enterprise.

Nevertheless, Christoph Schemionek, head of the AHK in Washington, stresses that the US stays a key marketplace for German firms.

“We are heavily invested here. Germany is now the third-largest foreign direct investor [in the US]behind Japan and Canada,” he advised DW.

Even extra vital, he added, are the employment alternatives created by German firms, which amounted to “almost 1 million American jobs.”

“This is exactly what the president wants, what he ran on [in his campaign],” stated Schemionek.

At the identical time, Trump’s tariff coverage is proving counterproductive in some areas as a result of the upper tariffs are making it troublesome to import, for instance, equipment into the US, which might “slow down the reindustrialization of the country,” he stated.

Deteriorating enterprise local weather

Germany Trade and Invest (GTAI) — German state-owned company for international commerce and funding promotion — paints a equally blended image.

GTAI’s commerce knowledgeable Roland Rohde says that regardless that the US market has remained Germany’s largest export vacation spot, enterprise circumstances have “deteriorated significantly.”

Data printed by the German Statistics Office (Destatis) reveals that German exports to the US fell by 7.5% year-on-year within the first 10 months of 2025.

“Over the course of the year as a whole, sentiment among German companies has clearly worsened,” Rohde advised DW.

Different outcomes

As the US tariff coverage is the dominant problem for German corporations buying and selling with or working within the United States, Rohde sees their affect various extensively among the many completely different sectors.

The German automotive trade, he defined, is exempt from the 50% tariffs on metal and aluminum Trump has imposed, paying solely a 15% common tariff on EU exports to the US. But on account of robust competitors within the US market, carmakers are unable to roll extra tariff prices over onto their merchandise.

By distinction, within the mechanical engineering sector, roughly half of all German equipment exports to the US are affected by metal and aluminum tariffs, he added.

Additionally, machine builders must address excessive administrative prices, because the steel content material and origin of their equipment should be documented for each part, nearly “down to the last screw.”

What helps them on this state of affairs, stated Rohde, was the truth that they typically provide extremely specialised merchandise for which there’s little competitors on the US market. This permits them to cross on a big share of the tariff prices to clients.

Limits to reshoring

Trump has repeatedly urged international firms to supply extra items within the United States to keep away from greater import tariffs. But Schemionek argues that underneath these so-called reshoring efforts, it’d make sense to “shorten supply chains — but only up to a point.”

The kinds of extremely specialised machines produced in Germany, Japan, South Korea, or Italy are merely not accessible within the US, he stated, nor can they simply be manufactured there. “The supply chains and the know-how are missing [in the US] because they are based on decades — sometimes centuries — of accumulated experience.”

Rohde agrees, noting that German mechanical engineering corporations are unlikely to develop manufacturing capability within the US, not least as a result of expert labor is in brief provide there.

‘Comply with the regulation’ appears important

DW reached out to a number of German firms to learn how they view present enterprise circumstances within the US.

German flag provider Lufthansa, for instance, stated that capability progress on North Atlantic routes is operating above common, with a rise of 6%. “People still want to fly, including to America,” the airline stated in a press release. Regarding range coverage, the airline merely said that it “generally complies with statutory requirements.”

Premium automaker Mercedes responded to the identical query in the identical trend, saying its US range packages and initiatives had been “in line with applicable legal requirements.”

Chemical firm BASF stated it complies with the legal guidelines of the international locations during which it operates — simply as Deutsche Telekom subsidiary T-Mobile US, which famous that it “always complies with the laws and regulatory frameworks” in its markets.

On outlook, Mercedes stated it’s responding to altering markets by focusing extra strongly on regional demand and progress alternatives, whereas BASF emphasised the continued significance of the US market and pointed to plans to develop manufacturing capability in Louisiana, with commissioning scheduled for 2026.

So, regardless of the challenges posed by Donald Trump’s erratic commerce coverage, GTAI’s Rohde doesn’t count on a dramatic pullback in bilateral commerce and enterprise.

German automakers, he stated, would plan to develop US manufacturing, albeit “within manageable limits,” as Trump’s tariffs “divert capital that would otherwise flow into investment.”

Overall, Rohde stays cautiously optimistic that the US will stay a “large and attractive sales market.”

“Against this backdrop, German companies are likely to strengthen their engagement in the US in the foreseeable future,” he added.

This article was initially written in German.