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Of all sectors, Germany’s automotive industry has been the most successful in exporting to the U.S. market in the past decade, followed by industrial machinery. But car sales and, to a lesser extent, industrial machinery sales sync with market cycles. A recession in the U.S. will harm both of these sectors, which account for more than half of German exports to the United States.

Investment appetite relates to a business’s potential for profit and expansion. For that, exports remain key, and U.S. economic performance is important to Germany not only because of the two countries’ bilateral trade and investment relations, but also because of the general impact the U.S. has on the global system. The U.S. runs a trade deficit with all of Germany’s main trade partners – an economic decrease in the U.S. negatively affects each of these economies, albeit in different ways.

It is still too early to conclude whether our forecast on the German economy is correct. Growth patterns in the first quarter can easily be turned by negative developments in the EU, Brexit negotiations, or anything that will cause a downturn of the American market – all things that Germany cannot control.

GPF Team
Geopolitical Futures is a company that charts the course of the international system. It’s an ambitious mission, maybe even foolhardy, but hear us out.