WIESBADEN (dpa-AFX) – A ray of hope for Germany’s exporters amid new tariff threats from the USA: In March, exports “Made in Germany” to all over the world grew surprisingly – despite the Middle East war. But there can be no talk of breathing a sigh of relief. With an ultimatum from US President Donald Trump to the EU, the trade dispute between Europe and the USA threatens to flare up again. In addition, German industry production fell unexpectedly and is suffering from the Iran conflict.
In March, exports increased by 0.5 percent compared to February to 135.8 billion euros, as the Federal Statistical Office in Wiesbaden announced. Compared to the same month last year, there was an increase of 1.9 percent. Analysts had expected a decline after a strong February. At the same time, however, production in the manufacturing sector fell by 0.7 percent – especially in mechanical engineering and energy production, while construction and the automotive industry increased.
“The prospects for a moderate recovery in industry are becoming increasingly cloudy in view of the Middle East conflict and the tariffs threatened by US President Donald Trump,” wrote Nils Jannsen, head of the German economy at the Kiel Institute for the World Economy (IfW).
Expensive energy with the Iran war dampens the mood
“After an interim high, the industry is on the decline again,” said economist Jens-Oliver Niklasch from the Landesbank Baden-Württemberg. The increase in energy prices due to the Iran war obviously caused a setback. “In order to improve the mood, the Strait of Hormuz must first be opened.”
But there is no end in sight to the war and the supply chain problems caused by the closure of the strait, says DIHK foreign trade chief Volker Treier. “The slight increase in exports is not enough to give the all-clear. The economic consequences of the war in the Middle East are not yet foreseeable everywhere, the economically stronger end is still to come.”
Business with the USA under pressure – and Trump continues to threaten
In March, the USA remained the most important foreign market for German exporters, although exports worth 11.2 billion euros represented a decline of 7.9 percent from the previous month. Compared to March 2025, exports even shrank by a good fifth (21.4 percent). “The tariff policy of US President Donald Trump is leaving clear signs of slowdown,” said Thomas Gitzel, chief economist at VP Bank.
And Trump is undeterred in pursuing his aggressive course, even though a US court declared temporary import tariffs of ten percent that he imposed to be illegal. He sets a deadline for the EU: If it does not fulfill its part of the transatlantic trade agreement by the USA’s birthday on July 4th, the tariffs would “unfortunately immediately rise to a much higher level,” he threatened on his Truth Social platform.
In the summer of 2025, the EU and the USA agreed on a tariff cap of 15 percent on most EU goods imports into the USA. In return, the EU committed to eliminating tariffs on US industrial goods and easing market access for US agricultural products. Among other things, tariff threats from Trump in the Greenland conflict slowed down the implementation of the deal.
There is also no tailwind for German exporters from China: exports there fell by 1.8 percent in March compared to February. In contrast, German exporters’ business with the EU grew by 3.4 percent to 78.4 billion euros and once again proved to be a source of support.
Growth forecasts capped
Exporters, once a pillar of the German economy, have long been under pressure due to Trump’s customs policy and competition from China. Most recently, the Iran war caused uncertainty and dashed hopes of a noticeable upswing. The increased oil prices are putting a strain on consumers at gas stations, curbing consumption and making the transport of goods more expensive – this particularly affects Germany, an export nation. The federal government has halved its growth forecast for this year to 0.5 percentage points.
Iran war puts pressure on companies
German exports of almost 136 billion euros in March were offset by rapidly growing imports of a good 121 billion euros. The bottom line was a foreign trade surplus of 14.3 billion euros, significantly less than in February (19.6 billion euros) – from the point of view of the trade association BGA, a warning signal. Companies are increasingly feeling the consequences of the Iran war in the form of rising freight forwarding prices and more expensive primary products, wrote President Dirk Jandura.
By 2025, German exports had increased again for the first time in two years – despite the tariff dispute with Trump. For 2026, the German Chamber of Commerce and Industry expects exports to stagnate due to the Iran war instead of an increase of 1.0 percent, as previously expected./ceb/als/DP/jha
