US tariffs curb German industrial investment, hitting automotive sector

A recent Ifo Institute survey of around 1,800 German manufacturers found that more than 60% of firms see U.S. tariffs as having a negative impact on their business, with the automotive sector most affected – 74% report adverse effects. The trade barriers have led to a rise in cancelled or postponed investment projects, with the share of companies abandoning plans increasing from 9% to 16% and roughly one‑third postponing initiatives. Many firms are also shifting the additional tariff costs onto U.S. customers; 34% of exporters say they pass the full tariff amount to buyers, while 28% pass on more than half.

The survey indicates that firms expect high tariff levels to persist for the remainder of the current U.S. administration, adding further uncertainty to long‑term investment decisions in Germany.