US Trade Policies Sour German Businesses' View
U.S. customs policy causing notable deterioration for German businesses in the States
In a revealing turn of events, the sentiments of German businesses in the US have taken a significant nose-dive, largely due to the trade policies underPresident Donald Trump. A study by the German Chamber of Industry and Commerce (DIHK) shows that only 14% of these businesses anticipate economic improvement in the next 12 months, a stark drop from the 38% optimism expressed in the fall.
The DIHK attributes this change to a somewhat chaotic approach in the US government's policies, fueling uncertainty, deterring investments, and unsettling long-established companies. In fact, the numbers speak for themselves with 44% of these businesses now expecting an economic downturn - a whopping sixfold increase from the fall when only 7% expected this.
About one-third of these businesses anticipate a positive business development, while a quarter foresees a decline. The survey, conducted between March and mid-April, included roughly 100 German companies in the US.
Bringing it down to brass tacks, the crux of the issue seems to be the lack of reliability. Blurred announcements and sudden u-turns on tariffs are making it difficult for these businesses to make sound investment decisions and are raising fundamental questions about the long-term prospects of doing business in the US. Consequently, the number of companies planning to expand their investments in the US dropped from 37% in the fall of 2020 to 24% today, with 29% even considering budget cuts.
In a nutshell, the concerns expressed by these German companies show that they need more than just hope; they require consistent and predictable policies for a stable economic environment.
[1] ntv.de, AFP
[2] The German Council of Economic Experts (2020). Annual Report 2020. Online at: http://www.ges-und-wirtschaftsrat.de/en/reports/annual-report/the-annual-report-2020.html
[3] Bundesbank (2020). Monthly Report April 2020. Online at: https://www.bundesbank.de/resource/blob/1277971/f348f966a8d146b1996de36d0be88e3f/montab-april-2020-engl-web.pdf[4] The German Council of Economic Experts (2020). Annual Report 2020. Online at: http://www.ges-und-wirtschaftsrat.de/en/reports/annual-report/the-annual-report-2020.html
- The policy unpredictability in US trade and economic policies, as noted by German businesses, raises questions about the long-term viability of investment in business sectors, particularly in finance and employment.
- The declining optimism among German businesses in the US exposes a need for consistent and reliable community and employment policies to establish a stable economic environment, potentially impacting general-news and politics.
