Tariff Turmoil Hits German Machinery Exports in H1: What This Means for Global Investors and Businesses
FRANKFURT – German machinery exports declined by 3.4% year-on-year in the first half of 2025, reflecting the impact of ongoing global trade tensions, according to data released by the German Mechanical Engineering Industry Association (VDMA) on Thursday.
During the first six months, German manufacturers in the machinery and plant engineering sector exported goods worth €98.3 billion ($114.5 billion). When adjusted for price changes, the decline reached 4.9% compared to the same period last year. The second quarter was particularly affected by the trade conflict initiated by US President Donald Trump, the VDMA noted.
The association highlighted that repeated tariff threats and continuing uncertainty significantly hampered business activities. German machinery exports to the United States, the sector’s largest market, dropped by 9.5% year-on-year.
Johannes Gernandt, chief economist at VDMA, warned that the trade conflict is likely to continue weighing on export performance into the third quarter amid persistent uncertainty. Although manufacturers are seeking alternative markets to offset losses, exports to European countries also fell by 3.7% in the first half of the year.
“However, the recent rise in orders from eurozone countries offers hope for a positive export trend in this crucial market,” Gernandt said.
On a brighter note, exports increased to MERCOSUR nations as well as to the Near and Middle East, signalling opportunities in these regions, according to the VDMA.
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The slowdown in German machinery exports, driven by ongoing global trade tensions and tariff uncertainties, signals risks for Omani businesses reliant on European industrial equipment, potentially leading to supply chain disruptions and price volatility. However, the growth in exports to the Near and Middle East presents a strategic opportunity for Omani entrepreneurs and investors to capitalize on increased regional sourcing and partnerships, enhancing local industrial resilience and diversification. Smart investors should now focus on strengthening regional trade ties and exploring alternatives amid global market uncertainties.
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