A significant shift in global trade relations away from the United States is anticipated by nearly one-third of industrial companies, according to a survey released Thursday by the Ifo Institute in Munich. Only 17 percent of respondents expect an increase in trade with the U.S.
The survey indicates that over 60 percent of industrial businesses have experienced negative impacts resulting from U.S. tariffs introduced since January. Export-intensive sectors like mechanical engineering (87 percent) and metal production (68 percent) are particularly affected. Even companies operating within the U.S. are feeling the effects; more than 80 percent report discernible disadvantages.
“Trump’s tariffs represent a profound shock to trade policy, compelling businesses to re-evaluate global markets and re-align investments” stated Andreas Baur, Ifo’s Head of International Trade.
A third of the surveyed companies believe the U.S. market will diminish in importance. Simultaneously, roughly 40 percent anticipate growing sales opportunities within the EU single market and in India. Few companies foresee a decline in trade with either region. Views regarding the Chinese market are more varied; while only 17 percent expect a decrease, 25 percent foresee an increased significance for their business. Furthermore, 59 percent of companies expect to see intensified competition on European markets as Chinese suppliers capitalize on the U.S. tariffs.
Lisandra Flach, Director of the Ifo Center for Foreign Economic Relations, emphasized the need for political action. “To ensure German companies remain competitive internationally, policymakers must provide reliable framework conditions and facilitate access to new markets. The EU should swiftly ratify the Mercosur agreement, advance further trade agreements and simultaneously dismantle barriers within the single market.
Many businesses are already reacting proactively. Nearly 30 percent of companies with investment plans for the U.S. have postponed projects and 15 percent have canceled them entirely. Investment in Germany is also slowing; 21 percent are postponing projects, while 8 percent report cancellations, particularly among those negatively impacted by the U.S. tariffs.