Challenging Global Business Climate Satisfaction Growing Among German Firms Worldwide
In the realm of international commerce, it's a came-up-short story for German firms venturing abroad. Facebook|Twitter|Whatsapp|E-Mail|Print|Copy Link The global economy is living through turbulent times, and German businesses abroad have been feeling the brunt of it. This, according to the World Business Outlook (WBO) of the Chambers of Foreign Commerce (AHK), for Spring 2025.
Volker Treier, the foreign trade chief at the German Chamber of Industry and Commerce (DIHK), paints a grim picture. "The new US trade policy is gouging German companies in their overseas ventures, hard as a freight train," Treier says. He continues that the US trade policy and its international ripples are setting off seismic waves in the global economy, causing investors to lose faith in steady ground.
This isn't just a nuisance - investments are being put on hold or nixed, traditional trade partnerships are under review. The uncertainty isn't ebbing anytime soon.
The survey, conducted between March 17th and April 14th, gathered around 4,600 responses from German companies stationed in over 90 countries. The timing of the survey period, falling as it did during significant geopolitical turmoil - including the so-called "Liberation Day," when the US President announced tariffs against almost all US trading partners - has contributed to the gloomy picture. Only 19 percent of companies anticipate an improvement in their local economies compared to the 27 percent who expressed optimism in the fall. A third of the respondents, however, predict a downward spiral.
Sources: ntv.de | rts
Behind the Numbers: Sectoral Sands Shift
The vibrant colors from the brushstrokes of US trade policies and international responses have painted a rather muted picture for German businesses. Let's consider the details:
- US Trade Policy Maelstrom: The unpredictable seas of US trade policies, particularly the resurface of tariff threats, have investors clutching life vests, causing waves of uncertainty regarding global trade and economic stability[1][3].
- German Economic Mood Swings: The German government has forecasted economic stagnation in 2025, thanks in part to the challenges posed by US protectionism. This, in turn, has an immediate and indirect impact on Germany’s growth due to its high foreign trade openness[3].
- Redundancies and Pessimism: A substantial number of German companies, around one-third, are planning to trim their workforce in 2025 due to economic pessimism. This is particularly evident in the manufacturing sector, where geopolitical tensions and high energy costs are of significant concern[2][4].
- Sectoral Swings: Although the construction sector has managed to maintain a positive outlook in some areas, it is not entirely insulated from broader economic challenges. In contrast, the service sector appears a tad more optimistic compared to manufacturing[4].
- Stability Tug-of-War: The ongoing tariff squabbles and geopolitical tensions are eroding global economic stability. The German government and EU are under pressure to come up with stabilizing measures to combat these challenges[4].
Investments and Odds: A Yo-Yo Game
- Climate of Cash: Investment opportunities find themselves under the shadow of uncertainty brought on by trade policies and geopolitical risks. Whilst robust public investment in construction is a plus, overall, companies are hesitant about their future investments[1][3].
- Trade Ties: The relationship between the US and German companies is crucial, and any US policy shifts can have substantial impacts on their overseas operations[3].
- The Community policy of the German Chamber of Industry and Commerce (DIHK), Volker Treier's foreign trade chief, warns that the current US trade policy is causing deterioration in the outlook for German companies engaged in vocational training and investments overseas.
- The Chambers of Foreign Commerce (AHK) published a World Business Outlook report for Spring 2025, noting that tariffs imposed by the US during the survey period from March 17th to April 14th have contributed to a pessimistic outlook for businesses, with only 19% of companies anticipating an improvement in their local economies.
- The finance sector is taking a considerable hit as a result of the unstable global economy, leading to businesses putting investments on hold or canceling them altogether.
- The survey also indicates that general-news events such as war-and-conflicts and political instability contribute to the deterioration in the outlook for businesses overseas, as one-third of the respondents predict a downward spiral.
- Politicians and the German government are under pressure to implement stabilizing measures to counteract the negative impact of geopolitical tensions and US trade policy on the vocational training programs and overseas operations of German businesses.
