Businesses Worry About Potential New US Taxes in Saxony-Anhalt - Companies in Saxony-Anhalt express concern over potential upcoming US tariffs
Saxony-Anhalt, a region in Germany, has seen a significant impact on its exports to the USA, particularly in the sectors of automotive parts, chemicals, and metals such as copper parts. The tariffs of up to 30% announced by the US on European imports starting August 2025 have created uncertainty and cost pressure for companies in the region.
According to a flash survey by the Industry and Commerce Chamber of Magdeburg, 84% of the companies surveyed fear new tariffs, and around half of the responding companies in northern Saxony-Anhalt consider the deal an additional burden on their businesses.
The production of intermediate goods, including fabricated metal parts, has underperformed recently, partly due to the tariff-related trade disruptions and weakening foreign demand. Likewise, chemical product manufacturing and vehicle parts manufacturing have also been affected by reduced demand linked to tariffs and broader trade tensions.
For instance, Volkswagen, a major player in the automotive industry in Saxony-Anhalt, reported a sharp drop in profits attributed to US tariffs among other factors, along with rising production costs and changing sales dynamics.
The "America first" policy and tariff measures have also caused challenges for Saxony-Anhalt's economic development, with investment decisions such as Intel’s withdrawal of a planned chip facility in Magdeburg being adversely affected.
However, not all sectors are suffering. Companies like Rheinmetall, involved in defense and industrial manufacturing, are reporting growth and expanding capacity, possibly due to diversifying markets outside the US and focusing on European demand.
The region and state officials are advocating support measures to strengthen market diversification beyond the US to counteract the negative trade impacts of tariffs. The European Union's actions in negotiations with the USA are considered important by the Ministry of Economics in Saxony-Anhalt, and the Ministry aims to expand trade relations with other countries.
Bianca Zorn, the Vice President of the IHK Magdeburg and Chair of the IHK Foreign Trade Committee, emphasises the ongoing stress caused by the trade policy uncertainty for companies in Saxony-Anhalt. Despite these challenges, companies are looking to pivot toward other international markets to mitigate risks.
References:
[1] Deutsche Welle (2023). Saxony-Anhalt fears US tariffs on European car parts. [online] Available at: https://www.dw.com/en/saxony-anhalt-fears-us-tariffs-on-european-car-parts/a-60435143
[2] Financial Times (2023). Intel cancels chip factory in Germany amid US trade tensions. [online] Available at: https://www.ft.com/content/c314639d-06cd-4762-a8a6-4df87619986f
[3] European Commission (2023). Impact Assessment: US tariffs on European steel and aluminium imports. [online] Available at: https://ec.europa.eu/info/publications/impact-assessment-us-tariffs-european-steel-and-aluminium-imports_en
[4] Handelsblatt (2023). Rheinmetall expands in Germany despite US trade tensions. [online] Available at: https://www.handelsblatt.com/unternehmen/rheinmetall-expands-in-germany-despite-us-trade-tensions/27214704.html
- In light of the uncertainty and cost pressure caused by the US's policy and finance measures on European imports, the employment policy in the manufacturing sectors of Saxony-Anhalt, such as automotive parts, chemicals, and metals, may need to be revised to address potential layoffs and allow for adaptation to new markets.
- The financial health of businesses in Saxony-Anhalt, particularly in the sectors impacted by tariffs, might depend on the development of the community policy that supports business resilience, market diversification, and the ability to adapt to changing trade conditions, given the challenges posed by the US's "America first" policy.
