“Germany is one of the countries most vulnerable to a spike in trade tensions. It has the world’s largest current account surplus (8% of GDP), which includes a trade surplus with the United States of $66 billion. Exports account for 46% of its GDP,” National Bank Financial analysts argue.
Key quotes
“Higher U.S. tariffs on car imports would hit Germany particularly hard given that the country’s automakers exported nearly 500,000 vehicles to the United States last year. In an effort to stave off these tariffs, Germany has pointed out that its automakers produced over 800,000 cars in the United States last year and employ over 100,000 Americans.”
“This threat coincides with worries that a hard Brexit could impede Germany’s access to its second-largest export market. Germany has a 47-billion-euro trade surplus with the UK, which happens to be the destination for one in every seven cars it produces. Finally, as if all this wasn’t enough, Germany must contend with the long-standing threat of China’s plan to challenge German dominance in advanced manufacturing in areas including robotics and machine tools.”
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