How Trump's tariffs could force Germany out of its comfort zone

Whether they realise it or not, most people in the US have a little bit of Germany in their lives. They don’t need to sport Adidas sneakers or snack incessantly on those addictive Haribo Goldbears. Rather, they rely on a range of products that power everyday items, be it their cars or dishwashers.

That’s all getting shaken up. Europe’s most beloved US President - Donald Trump - has announced he’ll be slapping down 15 percent tariffs on all EU countries, potentially leaving a lasting dent in the Bundesrepublik’s highly export-driven economy and Americans with higher prices on German goods.

With Trump dangling the on-and-off threat of global tariffs since April, there’s already been a visible impact on Germany’s economy — a reminder of how exposed the country’s export model has become amid Germany’s economic decline (not to mention a spike in “taco” memes, short for Trump Always Chickens Out, when the president doesn’t follow through).

German exports to the US dipped 3.9 percent in early 2025, with Commerzbank warning of a potential 20 to 25 percent decline in the next couple of years. Bundesländer like Bavaria, Baden-Württemberg, and even the small state of Saarland have taken particularly hard hits due to their auto and manufacturing industries. This has all led to speculation that China could overtake the US as Germany’s top trading partner — a development that would further underline Germany’s changing role in the world, as economic dependency and strategic alignment drift further out of sync.

Does this shifting trade relationship necessarily spell doom and gloom for the German economy, or is it a chance for the world’s third largest exporter to build itself into a more robust global player - with or without relying too much on die Amerikaner?

Dodging a bullet?

In a heavily photographed moment, Donald Trump and European Commission president, the German Ursula von der Leyen, stately shook hands at his Scottish golf resort in late July. They had just agreed to 15 percent tariffs on the bloc, a compromise which halved Trump’s original 30 percent threat and included concessions that the US would stay in NATO and continue to supply Ukraine with weapons.

Reactions ranged from highly critical (France’s prime minister François Bayrou dubbed it a “dark day for Europe”) to relieved resignation on the German side. Chancellor Friedrich Merz cautiously supported the deal, stating that it would at least alleviate pain and uncertainty.

Merz might have spoken too soon. Last week, Trump threatened a 100 percent tariff on all semiconductor exports — a gut punch for Germany, home to major suppliers like Bosch and Infineon. He’s also mulling tariffs on currently-exempt pharmaceuticals, which would especially sting given that 22 percent of Germany’s pharmaceutical exports are bound for the US.

For an economy built on predictability, these constant changes are almost as intolerable to plan-loving Germans as spicy food or criticising David Hasselhoff. It’s why, in boardrooms across the Bundesrepublik, the talk seems to be becoming less about the precise percentage of today’s tariff and more about how to stay nimble in the face of tomorrow’s surprise.

That likely will mean finding new export markets, hardening supply chains, and branching out in product and technology offerings (and making sure business models can survive a Trump tweet). On the other side of the Atlantic, a version of the “keep calm and carry on” ethos has already taken root: where US stock markets once tumbled on a tariff headline, they now shrug — and sometimes even spike — as companies and investors adapt to this new, volatile normal.

Biting the bullet?

Will ships leaving Hamburg harbour still be crossing the Atlantic in the future? Photo by Foto K. on Unsplash

Germany has long leaned on the US as a reliable customer, but these tariffs are a reminder that putting too many of your eggs in one big beautiful basket is risky business. The unpredictability seems to already be prompting German companies to diversify both in market reach and strategy.