Fewer Orders: US Tariffs Impact Machine Industry - German Machinery Orders Plummet Amid Trade Disputes
German machinery manufacturers are grappling with a significant drop in orders, particularly from key markets, due to ongoing trade disputes and global uncertainties. The sector, employing around 1.2 million people, is feeling the pinch, with orders shrinking by seven percent in August.
The decline was driven by a five percent decrease in domestic orders and an eight percent drop in foreign orders. While orders from Eurozone countries increased by 12 percent, orders from non-Euro countries decreased by 15 percent. This trend is partly attributed to the Trump administration's imposition of higher steel and aluminum tariffs on an increasing number of products, impacting 30 percent of US machinery imports from the EU.
The unpredictable US trade policy has led to restraint in orders, according to VDMA's chief economist. The association has lowered its forecast for this year, expecting a five percent decrease in production, with slight growth of one percent expected in 2026. The trade disputes, along with internal political and economic factors in various countries, have led to reduced investment in new machinery, affecting German manufacturers significantly. China, Turkey, Russia, and other emerging markets have all seen reduced demand for German machinery.
The machinery and plant engineering sector, a vital part of Germany's economy, is facing challenging times due to the global trade disputes. With orders shrinking and production forecasts revised downwards, the industry is bracing for a tough period ahead. However, the sector remains resilient, and industry experts hope for a return to growth in the coming years.
