Germany has reported an unexpected decline in exports in July, with goods shipped to the US falling for the fourth month as trade uncertainty hit Europe’s biggest economy.
Exports decreased month-on-month by 0.6% to €130.2 billion, the German Federal Statistical Office (Destatis) said on Monday. That compared to a forecasted increase of 2.5%, according to data provided by Trading Economics.
Although the US remained the largest market for German goods, exports to the US dropped a monthly 7.9% in July to €11.1 billion. That was the lowest level since 2021.
Ahead of the latest export data, the Ifo Institute had already lowered its growth forecast for Germany to 0.2% this year and by 1.3% in 2026. Compared to its summer forecast, Ifo revised its forecast slightly downward by 0.1 and 0.2 percentage points, respectively.
The European Union (EU)-US trade deal, initiated on August 1, locked in a maximum 15% tariff on most EU exports to the US. However, German companies have struggled to maintain competitiveness, even after the EU and the US avoided a full-blown trade war.
“The US tariffs are still having a noticeable negative impact on the German economy,” Tim Wollmershäuser, Head of Forecasts at Ifo, said. “The agreement in the tariff dispute between the US and the EU is not expected to have any direct impact on the forecast, as the effective tariffs are largely the same as in the summer.”
The tariffs may also have a negative impact on the US. The world’s largest economy could slow 0.7 percentage points, primarily due to inflation and lower consumer spending, the Düsseldorf-based IMK institute warned in July.
US fast-food chains, such as McDonald’s Corp. (NYSE:MCD) and Domino’s Pizza Inc. (NASDAQ:DPZ), could be impacted if the costs of ingredients have suddenly skyrocketed, according to Sid Malladi, CEO and co-founder of Nuvo, a business-to-business technology platform.
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