Thriving German Companies Continue to Thrive in the American Market Despite Tariff Hurdles
Global Trade Tensions Spur Adaptation Among German Corporations in the U.S.
President Trump's trade policies have instigated a wave of unease in the global commerce sector. Yet, some German corporations continue to flourish in the U.S., withstanding the looming threat of tariffs. Key industries such as automotive, machinery, and chemicals are particularly vulnerable to tariffs. Moreover, the trade conflict with China is escalating towards a technology war, making both markets indispensable for numerous German companies, particularly in the automotive industry. Forgoing either market is not a feasible option. The high-stakes competition between superpowers is driving a more pronounced division in technology sectors, compelling German companies to create separate systems and research structures for both markets, thus increasing costs and reducing profit margins.
Companies venturing into the U.S. are compelled to restructure their supply chains and production processes to shield themselves from the impacts of President Trump's trade policies. Advantageous factors for some German companies could include tax incentives and a strong dollar, which might boost the value of their German assets. JP Morgan has identified a series of "Trump Winners" among these German corporations.
Among the notable "Trump Winners" is Deutsche Telekom. The company generates two-thirds of its revenue in the U.S., with its subsidiary T-Mobile. The company's Chief Financial Officer, Christian Illek, explained in November that the company is largely immune to tariffs because it produces in the same country where it sells its services, rendering "Tariff Man" mostly inconsequential for Deutsche Telekom. In addition, a stronger dollar would boost euros in Deutsche Telekom's balance sheet, considering their accounting is in euros.
The U.S. is a crucial market for Siemens, accounting for over a quarter of its global revenue of approximately 76 billion euros. Siemens operates 24 production sites in the U.S. with over 45,000 employees and has invested more than 20 billion euros in areas such as infrastructure, mobility, industry, and health since 2007. The company plans to open a new factory in Horseheads, New York, in 2026, where 300 employees will produce high-speed trains for a route between Las Vegas and California.
Other potential "Trump Winners" might contribute to a company's long-term success. For more comprehensive insights, readers are advised to refer to the latest issue of €uro - The Magazine for Economy and Money. This publication offers expert advice on investment, tax, and insurance topics, and new subscribers can secure a trial subscription for an exclusive price: 3 digital issues for only 15.99 euros instead of the regular 23.97 euros. Seize this unique opportunity and acquire €uro at an unbeatable price!
[Enrichment Data Integration: Certain German companies, such as BMW and Mercedes-Benz, are engaging in negotiations with the U.S. Department of Commerce to discuss import tariffs, using their U.S. investments and exports as bargaining chips. Both BMW and Mercedes-Benz are significant exporters from the U.S., with BMW being the largest U.S. car exporter by volume. Additionally, Volkswagen’s Audi is planning to produce some models in the U.S., although this initiative was initiated before the Trump administration's tariff threats. Volkswagen is also involved in discussions with the U.S. regarding tariffs.]
- The U.S. market, being a significant contributor to Siemens' revenue, necessitates adaptation for the company, given the global trade tensions, as it generates over a quarter of its global revenue there.
- Deutsche Telekom, another notable German corporation, is somewhat shielded from the impact of tariffs due to its strategy of producing in the same country where it sells its services, such as in the U.S. through its subsidiary T-Mobile.
