German Export Growth in 2025 Driven by EU Markets Amid Challenges in USA and China

In 2025, German exports rose overall by 1%, largely supported by strong trade within the European Union, where exports reached 876.5 billion euros. However, shipments to major non-EU markets like the USA and China fell sharply by 9.3% each, dropping to 146.9 billion euros in the USA. This decline is attributed to increasing tariffs and stronger local competition, particularly impacting sectors such as machinery and automobiles.

Companies like Lauda, a temperature control device manufacturer from Baden-Württemberg, managed to maintain steady export levels to the USA despite these hurdles. Lauda's CEO, Gunther Wobser, acknowledged the competitive disadvantage for entry-level products due to tariffs but highlighted that specialized products can command premium pricing. The company plans to grow operations abroad while securing domestic jobs.

Industry leaders gathered at a summit in Schwäbisch Hall emphasized a shift towards local production abroad as a strategy to counter tariff and competition challenges. Dürr's CEO, Jochen Weyrauch, stressed the importance of producing where the customers are to better serve international markets. Meanwhile, Hildegard Müller, president of the automotive industry association, voiced concerns about maintaining production in Germany given high investment costs needed to stay competitive.

Economic experts like Lars Feld warn that local production alone cannot fully offset losses from the USA and China and advocate for new free trade agreements with markets such as India and Mercosur to sustain export growth. This underscores the need for policy efforts to complement business strategies in navigating the global trade environment.