Germany's economic data for September showed sluggish performance, with both exports and industrial output declining more than market expectations, suggesting that the two pillars of the country's economic model are showing signs of weakness early in the fourth quarter. According to data released by the Federal Statistical Office of Germany on Thursday, exports fell by 1.7% in September compared to the previous month, exceeding the market expectation of 1.4%; industrial output fell by 2.5%, far exceeding the expected 1.0%. Exports and manufacturing are important pillars of the German economy, and the weak data in September has raised concerns in the market about its future growth.
Currently, the market is also focusing on the potential trade risks brought by U.S. President Trump's re-election. Trump has stated that he will impose a 10% tariff on all imported goods, which is undoubtedly a significant challenge for Germany's export-driven economy. Analysts point out that Germany, as Europe's largest industrial and export powerhouse, could bear the greatest impact amid tense U.S.-EU relations. If the trade war escalates, core sectors such as German automotive, machinery manufacturing, and chemicals will be directly hit by tariffs, exacerbating the risk of domestic production slowdown due to export weakness.
Moreover, Germany's economy is not only facing external trade risks but also the impact of the global economic slowdown. As a crucial link in the global economic chain, German manufacturing has already been affected by global supply chain disruptions, while rising domestic energy costs and inflationary pressures have suppressed corporate investment intentions. If Trump's tariff policy is implemented, the production costs of German companies will rise further, potentially undermining competitiveness.
The Federation of German Industries (BDI) has expressed concern, stating that if U.S.-EU trade conflicts intensify, Germany's export dependency in manufacturing will pose a significant risk. The German government has been committed to promoting economic diversification in recent years but finds it difficult to break away from its high reliance on external demand in the short term, making the German economy particularly sensitive to changes in the external environment. Analysts note that Germany was once famous worldwide for its strong industrial prowess, but in the current context of trade conflicts and increased global economic uncertainty, this advantage has instead become a source of vulnerability.
Against the backdrop of intertwined domestic and international risks, Germany's economy faces multiple challenges. If U.S.-EU trade frictions intensify, Germany will become one of the biggest victims, with its economic growth engine under further pressure to slow down.
