There is growing concern in the German economy about Donald Trump’s re-election as US President next year. “A second Trump term would be bad news,” said the President of the Federation of German Industries (BDI), Siegfried Russwurm, on Thursday. “A president who denies climate change and questions support for Ukraine would not only pose major problems for Europe.”
It is far too early to speculate on the outcome of the election. But German industry should still prepare for possible scenarios. Polls give Trump a good chance of beating his successor and incumbent Joe Biden in the election in autumn 2024.
If the Republican actually wins, Foreign Trade President Dirk Jandura sees “difficult times” ahead for Germany and Europe in trade policy. “Trump would most likely continue his ‘America First policy’ from his first term in office,” said the President of the Federal Association of Wholesale, Foreign Trade and Services (BGA). “As a result, he would again target the EU as the supposed biggest adversary after China.”
There is also a fear that the USA could then withdraw further from international bodies. In a worst-case scenario, the United States could withdraw from the World Trade Organization (WTO), heralding the end of global rules-based trade.
“Even if Joe Biden were to have a second term in office, not all problems would disappear”
The USA is by far the largest buyer of goods “Made in Germany”. From January to October 2023, German products worth 132 billion euros went to the States. That’s two percent more than a year before. Against this background, Industry President Russwurm described recent proposals from the Trump camp as “worrying”. “The idea of a 10 percent tariff on all US imports would trigger a cascade of negative effects,” he warned.
Trading partners would immediately take countermeasures. And that would set in motion a spiral of protectionist measures that would also significantly increase prices for US consumers and fuel inflation in the US. Trump’s first term in office was marked by great uncertainty for companies on both sides of the Atlantic: with tariffs on steel and aluminum and long-held threats to impose tariffs on car imports – which, however, were not implemented.
“Even if Joe Biden were to have a second term in office, not all of the problems that are currently burdening transatlantic economic relations would disappear,” said BDI President Russwurm. Many measures from the Trump era were continued or only defused with interim solutions, but not finally resolved. “An active trade policy, which also includes classic market access for all companies, has not yet been Biden’s priority,” said the BDI President. “It is questionable whether this would change in a second term.”