German export expectations plummet amid Trump trade war

Business expectations among German exporters have plunged to one of the lowest levels seen since the 2008 global financial crisis following the new tariffs announced by US President Donald Trump, a leading German economic institute said on Friday.

The Munich-based ifo institute's index deteriorated by 7.6 points to -9.8 in April, the worst value seen since the financial crisis, excluding the extreme slump caused by the coronavirus pandemic.

"The tariff conflict with the United States has interrupted hopes of a recovery in export business," said Klaus Wohlrabe, head of surveys at ifo.

"The high level of uncertainty regarding how the tariffs will actually develop will probably exacerbate the situation further," he added.

Export expectations plummeted across almost all sectors, the ifo survey showed.

Car manufacturers' hopes of a recovery have been dashed, with the indicator falling by 11.8 points to -13.7.

Trump has imposed tariffs of 25% on vehicles imported into the US, and at the beginning of May, tariffs on imported parts are expected to follow.

In mechanical engineering, the index even fell by some 16 points to -10.

Expectations in the chemical industry, another important sector for the German economy, also showed a significant decline.

The only sector bucking the trend was the beverage industry, with the indicator rising by some eight points to 32.4.

According to Wohlrabe, this is due to the fact that German beverage makers mainly export within the European Union and are therefore less affected by Trump's trade war.

However, the industry only plays a subordinate role in German exports compared to mechanical engineering or the automotive industry, for example.