Recent surveys and economic data confirm that German small and medium-sized enterprises (SMEs, often called “Mittelstand”) are feeling a significant economic crunch from US trade policies, particularly the tariffs and unpredictable measures implemented under President Donald Trump’s second term starting in 2025.
A fresh survey highlighted in reports from March 14, 2026 via dpa and others, shows that policies under US President Donald Trump are having a negative impact on more than half of German SMEs with business ties to the United States. This aligns with broader trends where US tariffs—such as baseline rates around 15% on many EU imports following adjustments from initial higher threats, plus elevated duties on sectors like steel, aluminum, autos, and machinery—have disrupted transatlantic trade.
German exports to the US fell sharply in 2025, by about 9.4% (January-November compared to 2024), totaling around €136 billion, according to Germany’s federal statistics office (Destatis). Sectors hit hardest include automobiles (down 14%), machinery (9.5%), and chemicals—areas where many SMEs operate as suppliers or specialized exporters.
Over two-thirds of companies cite trade policy uncertainty as a major obstacle, with 54% reporting rising costs from customs procedures and bureaucracy per DIHK surveys. Many SMEs face higher administrative burdens and reduced competitiveness in the US market.
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German investments in the US dropped nearly 45% in Trump’s first year back driven by tariff fears and a weaker dollar. This affects not just large firms but also SMEs reliant on US markets or supply chains. Among German companies with US operations, expectations have soured dramatically—only 14% anticipate economic improvement in the near term down from 38% in late 2024, while 44% foresee a downturn.
While some larger German firms with US manufacturing presence report mixed effects; 86% negatively impacted by tariffs but some benefiting from local advantages, SMEs—often more export-dependent and less able to relocate production—are disproportionately vulnerable. Many are shifting focus to the EU single market or other regions to mitigate losses, but overall, these policies contribute to Germany’s ongoing economic challenges, including stagnation risks.
Intra-European trade has provided some offset, helping total German exports hold up better despite the US slump. However, the “zigzag” nature of US policy continues to foster uncertainty, hampering investment and growth for these vital backbone companies of the German economy.
SMEs, often more export-reliant and less able to absorb costs or relocate than large corporations, focus on cost reduction, risk diversification, and adaptation rather than full confrontation. A top response, with over half of affected firms (per DIHK surveys) planning to scale back US operations or redirect sales.
Many shift emphasis to the EU single market, Asia including surging investments in China for local production to serve that market, or other regions like Latin America or emerging economies. This helps offset the ~9% drop in US exports seen in 2025 by tapping intra-European trade and non-US growth areas. Companies review and reconfigure supply chains to minimize tariff exposure, such as sourcing components from non-tariffed countries, using third-party assemblers in lower-tariff regions, or increasing local content in products exported to the US.
For those with resources, nearshoring or even limited reshoring reduces import duties. Detailed supply chain mapping is often the first step recommended by consultants like KPMG to identify vulnerabilities and optimize flows.
Innovation plays a big role: companies like Implantcast (high-tech prosthetics) offset hikes by emphasizing advanced, irreplaceable products (e.g., growing tumor prostheses) that justify premium pricing despite duties. Many redirect efforts to bolster sales within Europe, where no tariffs apply, and advocate for stronger EU policies.
Business associations push for unified EU responses, including potential countermeasures, to protect industries. This includes exploring financial hedging tools to manage currency and cost volatility from trade uncertainty. Pursuing tariff refunds or exemptions where possible, reviewing contracts for force majeure or price adjustment clauses, and minimizing bureaucracy through better customs compliance.
Some explore US-based partnerships or distributors to establish a more local presence without full relocation. While many suspend or reduce US investment, others with existing footprints increase them modestly in 2026—focusing on workforce development, digital transformation including AI, and local manufacturing advantages to bypass import tariffs. Larger SMEs or those in protected niches benefit from this, as US production shields against duties.
These strategies reflect a pragmatic shift: accepting some short-term pain while building long-term resilience through diversification and efficiency. Uncertainty from “zigzag” US policies remains a top burden, so flexibility is key. Larger German firms sometimes absorb costs or expand US plants, but SMEs lean more on market pivots and innovation due to limited scale. If tariffs ease or new deals emerge, many expect a rebound—but for now, adaptation dominates.