Press releases

President Trump’s new reciprocal US tariffs would reduce German exports to the United States by less than three percent. The ifo Institute has simulated these reciprocal tariffs, in other words, if the US were to increase tariffs on products by the amount levied by its trading partners on corresponding US products. If the EU were to take no countermeasures, German exports would fall by 2.4 percent. “Potentially, over half of all German exports to the United States are affected,” says ifo trade expert Lisandra Flach.

Germany is among the nine most important countries in total worldwide when it comes to global semiconductor production. That is according to a study by the ifo Institute and EconPol Europe, which will be presented today at the Munich Security Conference. South Korea, Taiwan, Singapore, Malaysia and China produce over 50 percent of the chips traded worldwide. Germany, Japan, the United States and the Netherlands contribute a large proportion of the equipment for chip production.

Labor demand in the German automotive industry has fallen to a low. The number of job ads in October 2024 was 53 percent lower than in August 2023. In December 2023, companies focused on electromobility were offering almost twice as many vacancies as those focused on combustion engines. This difference has now dropped to 41 percentage points. This has been shown by analyses of the ifo Institute and the online job site Indeed of around 1.6 million job ads from almost 2,400 companies in the German automotive industry.

Extensive expansion of the EU single market for services can permanently increase gross value added in Europe by 2.3 percent or 353 billion euros. “Trump’s election as US President demands answers from Europe. A deepening of the single market, especially in relation to services, could increase the EU’s economic weight and make the EU more attractive for US companies,” says Lisandra Flach, Director of the ifo Center for International Economics.  

Defense spending of more than the NATO target of 2 percent of gross domestic product (GDP) would be necessary for Europe to be able to defend itself without the protective umbrella of the US. This is the conclusion of an analysis by the ifo Institute. “European countries would have to significantly increase their efforts because budgets have been too low for years to build up an adequate defense capability,” says ifo researcher Florian Dorn.