German Industry Investment Slowed by US Tariffs

A recent Ifo Institute survey finds that more than 60 % of German industrial firms report negative effects from the United States' tariff policy. The impact is strongest in the automotive sector, where 74 % of companies say the tariffs have harmed them – an increase of 14 percentage points over the previous year.

Investment plans are being cut or postponed: the share of firms that have cancelled projects rose from 9 % to 16 %, and about one‑third are delaying projects, up 11 points. Companies are trying to pass on the extra costs; 34 % fully shift them to US customers, another 28 % pass on more than half, while a quarter absorb the costs themselves, hurting margins.

Most firms expect the high tariff level to continue. Sixty‑three percent anticipate tariffs remaining unchanged, and 13 % foresee further increases, signalling an “alarm signal” for German investment, according to Ifo researchers.