US election: Trump or Harris? What's coming to Europe

Niemand weiß genau, was Donald Trump anstellen wird, wenn die Wähler ihn zurück ins Weiße Haus bringen sollten. Seine bedrohlichen Ankündigungen zu Importzöllen gehen nie ins Detail und ändern sich im Laufe der Zeit. Man weiß überdies nicht, wie ernst der republikanische Präsidentschaftskandidat sie selbst nimmt und wie verhandlungsbereit er ist. Schließlich sind da noch die offenen Fragen, wie viel exekutive Macht ihm die amerikanische Verfassung zugesteht und wie viel er von seinen Ideen in die Tat umsetzen kann, falls er nach einem eigenen Wahlsieg keine Mehrheit dafür im Kongress zu organisieren vermag.

Die Unsicherheit ist den Umständen geschuldet, sie hat aber auch Methode. Trump sieht es als probate Strategie an, Freund und Feind über seine Schritte im Ungewissen zu lassen, wie Mitstreiter bestätigen. Geradezu beruhigend wirkt im Vergleich die Perspektive einer Regierung unter der demokratischen Kandidatin Kamala Harris. Sie hat keine neuen Zölle angekündigt. Alle Zeichen deuten darauf hin, dass sie den protektionistischen Kurs von Präsident Joe Biden fortsetzen wird, gewürzt mit eigenen indus­trie­politischen Elementen. Den „Inflation Reduction Act“ mit seinen klimapolitischen Subventionen wird Harris ausbauen, wenn die Wähler sie lassen.

Deutschland genießt nicht das Privileg des unbeteiligten Beobachters einer unterhaltsamen Konfrontation. Dem Land droht vielmehr ein veritabler Schaden. Die Vereinigten Staaten sind neben China Deutschlands wichtigster Handelspartner. Die Bedeutung der USA als Abnehmer von Autos, Maschinen und von Produkten der Chemieindustrie hat in den vergangenen Jahren noch zugenommen. Güter und Dienste im Wert von mehr als 200 Milliarden Euro setzte die deutsche Wirtschaft im vergangenen Jahr in den Vereinigten Staaten ab. Das entsprach elf Prozent des Gesamtexports. Der Import aus den USA lag rund 80 Milliarden Euro niedriger. Noch aussagekräftiger ist, dass nach Kalkulation des Ifo-Instituts rund sieben Prozent von allem, was in Deutschland hergestellt (Güter) und bereitgestellt (Dienste) wird, in die Vereinigten Staaten geht.

Die Dimension unterstreicht, warum Trumps wirtschaftspolitische Idee eines Zolls von 20 Prozent auf alle Importe, egal, ob von Freund oder Feind, so folgenreich ist. Einfuhren aus China sollen generell mit 60 Prozent Zollaufschlag belegt werden, dazu kommen je nach Stimmung Trumps noch Sonderzölle auf Autos oder gegen Länder, die sich vom Dollar als Reservewährung verabschieden wollen. Egal, ob 20 Prozent Aufschlag oder 10 Prozent, die Trump gelegentlich auch androht: Die deutsche Industrie wäre ins Mark getroffen. Die Hersteller von Chemikalien einschließlich Pharmaprodukten, Fahrzeugen und Maschinen haben noch nicht einmal die jüngsten Schocks verwunden.

One of the rounds of tariffs could ignite the wind that causes the German economy to slide, write banking economists at ABN Amro. So far, Germany has managed to avoid mass layoffs, says economist Bill Diviney from ABN Amro. But the case of Volkswagen shows that there is a limit to a human resources policy that can retain proven workers even in times of underemployment.

Economists have carried out model calculations to calculate the effects of the tariffs threatened by Trump. In the “Tough Trump” scenario of an unrelenting president who imposes 60 percent tariffs on Chinese imports and 20 percent on imports from all other countries, German exports to both America and China would collapse. The Ifo Institute comes to this conclusion.

American business shrank because German products simply became more expensive compared to American competition, which could also benefit from a Trump corporate tax cut. German industry would also sell fewer primary and intermediate products to China if the Asian country could ship significantly fewer goods to America because of the draconian tariff surcharge. The losses for Germany would only be partially offset, for example through more exports to Mexico or Canada. Both countries are linked to the United States through a free trade agreement negotiated by Trump's first administration. They could become a stopover for deliveries to the United States. However, this scenario stands or falls on the assumption that the trade pact, which will be put to the test in 2026, would be renewed by Trump and the heads of government of the other two countries. Trump's campaign statements give no reason for confidence in this regard.

According to the Ifo analysis, in the “Tough Trump” scenario, German exports will fall by almost two percent, with large differences between industries. Car sales in the USA would collapse by 32 percent and sales of pharmaceutical products by 35 percent. This would be particularly difficult for this industry to cope with because the USA is such an important market. The Ifo calculations show that the pharmaceutical industry could compensate for the shortfalls to a large extent through deliveries elsewhere. German economic output would shrink in the “Tough Trump” scenario. The employer-related German Economic Institute in Cologne expects the gross domestic product to be 1.5 percent lower in 2028.

Things could get worse. Looking for budget savings opportunities, Trump may be tempted to scrap the Inflation Reduction Act's tax breaks, trade expert William Reinsch speculates in an analysis for the Center for Strategic and International Studies think tank. That would be negative for some German air conditioning companies that benefit from the money that the funding law – despite all the protectionist clauses – reaches them as a subsidy. It would be even worse if Trump closed the “leasing loophole,” which gives buyers of German electric cars in the United States the chance to benefit from the maximum subsidy of $7,500 if the vehicles are leased. When it became public, this special clause caused a sigh of relief in German industry.

There is also the threat of trouble in two simmering trade conflicts: Trump's steel and aluminum tariffs were only put on hold by his successor Joe Biden, as was the dispute over Airbus subsidies. It is also unclear how Harris, as president, wanted to resolve both conflicts. Harris has strong protectionist leanings, as demonstrated by her vote against the North American Free Trade Agreement in the Senate.

The medium and long-term consequences for Germany as a business location would be more serious than the direct damage of new tariffs under Trump. Germany is suffering from a lack of investment, which is contributing to productivity development stagnating and falling further behind the USA. However, productivity gains are the source of prosperity. In Germany, notes economist Thomas Obst from the IW, two thirds of investments depend on exports, which would be dampened by the Trump tariffs. It's as if a heavy backpack is being loaded onto a runner who is about to be lapped.

There is no reason for Germany and the European Union to surrender to their fate after the presidential election in the United States. There is hope in Brussels that they can soften up Trump. In the “Soft Trump” scenario of a mild president, as outlined by analysts at ABN Amro Bank, European negotiators succeed in pushing through an exception to Trump's tariff regime with a combination of tangible concessions and serious threats. “Soft Trump” would initially have an economic impact, but over time the EU could actually benefit because of its customs privileges.

The prerequisite for the success of transatlantic negotiations is that the Europeans deal with one of Trump's obsessions: the American trade deficit with the EU and especially with Germany. “From an economic perspective, a surplus or deficit in the bilateral trade balance is neither good nor bad per se,” explains the Ifo Institute. For Trump and his trade policy advisor Robert Lighthizer, a trade deficit is evidence that their partner is acting unfairly. Germany would also face this accusation if Harris wins the election. The criticism of the German export model reaches far into the democratic camp and has already been led by democratic presidents, says Peter Sparding from the Center for the Study of the Presidency & Congress. Unlike Biden, Harris is no longer transatlantic.

Signals came from Brussels that the EU could buy more goods from the US to reduce pent-up anger and the trade deficit. Liquefied gas and agricultural products could be used. Last year, Europe absorbed half of America's liquefied natural gas. The Biden administration slowed down developments by initially not issuing any new export permits. Trump would lift this blockade and help increase export capacity for which buyers are sought. However, the EU cannot order that European companies order more liquid gas.

However, EU states could order significantly more military goods from the USA, such as additional F 35 fighter jets, which go beyond the current order volume. Germany has ordered 35 of them so far, but is in talks for eight to ten more, as was reported in the summer. Such an order could have a disarming effect. The aircraft are manufactured entirely in America; an order would help the stumbling Boeing group and take the edge off the security policy debate.

The idea that “Germany's turnaround”, the change propagated by Chancellor Olaf Scholz to compensate for years of neglect in defense, has failed is not only among Trump and his colleagues, as Nadia Schadlow from the conservative Hudson Institute says. Harris' advisers also share the idea that Europe is not doing enough to defend its interests.

According to the Ifo analysis, the problem in possible negotiations with America is asymmetry. More than eight percent of industrial value creation in Europe is exported directly or indirectly to the United States, while only around 3.3 percent of industrial value creation in the USA depends on demand in the European internal market. In other words: the EU has more to lose. This takes some of the bite out of the threat of tariffs of up to 50 percent on American goods, which the EU discreetly launched as part of its carrot-and-stick strategy. The European position is further undermined by the fact that the EU's trade-weighted average import tariff is higher than the average US import tax.

Another option for Europe would be to generally get itself into economic shape to remain attractive to the United States. The International Monetary Fund is urging the EU to eliminate existing internal trade barriers. In particular, opening up the service sector, where Americans have comparative advantages, could spur momentum while keeping an American government happy.