German exports to US reach new high as election looms
October 16, 2024
Nearly 10% (9.9%) of German exports went to the US in 2023, the highest level in 20 years, the Federal Statistical Office of Germany said Wednesday.
Germany witnessing major trade surplus with US
The office, which is known by its short name Destatis, said Germany exported €157.9 billion ($171.8 billion) worth of goods to the US last year.
The US in particular is an important foreign market for German pharmaceutical goods, with 23% of German pharma exports going there in 2023. The US is also an important market for German machinery and cars.
At the same time, Germany imported €94.7 billion in goods from the US last year, resulting in a record trade surplus of €63.3 billion with the US, the highest level since 2017 in comparison with other destination countries for German goods.
The economic relationship between the US and Germany is also robust in other ways. In 2022, for example, 11.5% of the 38,500 foreign controlled-firms in Germany had a parent company based in the United States.
All in all, the US has been the second-most important trade partner for Germany since 2021, behind China. In the first half of this year, however, German trade turnover with the US exceeded trade with China.
US election: Trump or Harris win will impact German economy
The major trade imbalance between Germany and the US means the upcoming US elections in November could have drastic consequences for the German economy.
The two candidates, Democratic Vice President Kamala Harris and the Republican former President Donald Trump, have vastly different views of trade and the global economy.
Harris will likely continue incumbent US President Joe Biden's policies of multilateralism and consultation with allies before making decisions on issues such as trade or security.
Although Harris may keep some tariffs in place on Chinese goods and in certain areas such as electric vehicles and semiconductors, she is unlikely to impose sweeping tariffs on EU products. This means that US-German economic ties will likely continue to flourish during her term.
Trump, meanwhile, has said he will pursue an "America First" approach toward trade and has vowed to slap 10% — or even 20% — blanket tariffs on all imports if he wins the election. These tariffs would not only hurt German exports but also potentially spark a fresh trade war between the US and China, which would also impact Germany.
Last month, the Ifo Institute for Economic Research in Munich and EconPol Europe warned that German exports to the US could drop by almost 15% if Trump returns to the White House.
Edited by: Alex Berry