The German economy reduced its production again in February. The exports, on the other hand, rose – obviously because of attracts by Donald Trump's customs policy.
German exports have grown in front of the tariffs announced by US President Donald Trump because of the increasing demand from the United States. In February, exports rose by 1.8 percent to the previous month, as the Federal Statistical Office announced.
In contrast, production in February shrank unexpectedly. Industry, construction and energy suppliers together produced 1.3 percent less than in the previous month, according to the statistics office.
Search for others Trade partners?
The US export business increased significantly in February: exports to the world's largest economy, which is also Germany's most important trading partners, climbed 8.5 percent to 14.2 billion euros. In the future, however, there will be a loss: President Trump has announced last week that in future almost all goods from the European Union will be due to an inch of 20 percent.
It is even 25 percent for steel, aluminum and cars. “The export seems to have benefited from pulling effects because of the foreseeable one,” said the chief economist at Hauck Aufhäuser Lampe Lamp private bank, Alexander Krüger. “Companies are well advised to look around for other trading partners than the United States.”
In February, goods worth 70.2 billion euros were exported to the EU countries, an increase of 0.5 percent to the previous month. Exports to the People's Republic of China rose by 0.6 percent to 6.8 billion euros, which, on the other hand, dropped to the United Kingdom by 3.8 percent to 6.5 billion euros.
Production: “Little view of relaxation”
Production in German industry was 4.0 percent compared to the same month in February. “The production data indicates a continued sideways movement of industrial production,” the Federal Ministry of Economics commented on the development. “In view of the order incoming in the trend and the recently announced US customs enhancements, it remains to be seen whether the recently observed noticeable improvement in the mood indicators will exist in industry.”
Economists are rather skeptical. “With the US tariffs that have now been announced, there is little view of an early recovery,” said the chief economist from Hamburg Commercial Bank, Cyrus de la Rubia. “Especially since the competitive pressure from the countries, which are also exposed to higher hurdles for the US market, will increase.”
Trade war threatens to escalate
The German Foreign Trade Association BGA fears a further escalation in the trade conflict after the Chinese counter-tariffs on US goods. “This is only the beginning of the catastrophic customs avalanche that President Trump willingly kicked off,” said BGA President Dirk Jandura of the Reuters news agency. “It will cause considerable economic damage on all sides, worldwide.”
