July 7, 2025
The US customs policy hits German federal states very differently. A new IFO study shows that while auto regions are at risk of massive losses, North German countries get away lightly. The regional economic structure decides on winners and losers.
The punitive tariffs threatened by Donald Trump will not meet Germany evenly. Instead, a federal customs roulette is emerging, in which some federal states will bleed significantly more than others. The IFO Institute has now analyzed the regional effects of US trade policy for the first time-with surprising results.
Car rist in the customs crosshairs
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The Saarland, Lower Saxony and Baden-Württemberg are particularly in the fire. Depending on the scenario, their industrial added value could collapse by up to three percent. The reason is obvious: the dominant automotive industry there is in particular focus of American customs policy. Bavaria and Bremen also meet hard- the combination of car and steel production makes them particularly vulnerable.
Hamburg benefits from shipbuilding
Hamburg of all people could emerge from the trade conflict as a winner. “The industrial focus of Hamburg on other vehicle construction, including shipbuilding, could compensate for the negative customs effects of the other industries,” explains Marcel Thum, managing director of the Dresden IFO branch, according to “Wirtschaftswoche”. Schleswig-Holstein and Mecklenburg-Western Pomerania also get off comparatively lightly.
Pharmaceutical locations between the chairs
Hesse and Berlin with their strong pharmaceutical industry stand on a crossroads. Your future depends largely on which product groups Trump is targeting. Ifo economic expert Robert Lehmann emphasizes: “Structural differences between the federal states are decisive like a strong presence of the automotive industry.”
Countdown to the customs hammer
Time is pushing. After a short break until July 9, the new customs sets should come into force on August 1st. Trump announced on Sunday to conclude several trade agreements, while other countries would be informed about higher customs sets. A race against time begins for the particularly affected regions.
The regional customs lottery could face Germany with a new economic policy challenge. While some federal states will need massive support, others could even benefit. This unequal concern makes a uniform German reaction to Trump’s trade policy significantly difficult. It will be crucial whether the EU is developing a common strategy or whether national interests are gaining the upper hand. For companies in the affected regions, the phase of strategic realignment is now beginning – with relocation of production, market diversification and possibly also painful adjustments to the workforce.
Frequently asked questions about “Trump’s customs policy”
- WElk German industries are particularly affected by US tariffs? The automotive industry is particularly in the crosshairs, followed by the steel industry. Other sectors such as shipbuilding could be less affected or even favored. The effects on the pharmaceutical industry depend heavily on which specific products are covered with tariffs.
- How can affected regions react to the tariffs? Affected federal states can counteracting business development, diversification of export markets and support in the change of production. In the long term, structural adjustments to the regional economy could be necessary to reduce dependence on the US market.
- When do the new US tariffs come into force? After the current break until July 9, 2025, the new customs sets are to be effective on August 1, 2025. Until then, the EU is trying to conclude trade agreements with the USA that could alleviate the effects.
Quele: Ifo-Institute, Whiw
