Concerns in German Economy After Election of Donald Trump
ResearchRepresentative Survey About New US Administration
German companies fear that Donald Trump’s presidency will adversely affect economic performance. These are the findings of a recent representative survey, conducted by ZEW Mannheim researchers in December 2024, of close to 850 companies in the German information economy and manufacturing sector.
“The majority of German companies in the information economy and the manufacturing sector expect the presidency by Donald Trump to have a negative impact on the performance of the German economy,” comments Dr. Daniel Erdsiek, who led the survey which was carried out by the ZEW Research Unit “Digital Economy”. “Around 75 per cent of the firms expect negative effects and of these, 15 percentage points represent respondents that think the effects will be very negative. Only around seven per cent believe that the new US administration will be beneficial to the German economy.
Manufacturing Sector More Sceptical Than Information Economy
Asked about their expectations regarding their own company’s or sector’s success, the respondents are slightly less concerned. In the information economy, 20 per cent expect a negative impact on their company’s performance and 26 per cent a negative impact on their sector’s performance. However, in the manufacturing sector these proportions are considerably higher: 43 per cent expect negative effects on their company’s performance and 51 per cent foresee negative impacts on the performance of their sector.
“The degree of pessimism about business performance depends not least on whether a company exports to the US. In the manufacturing sector, for example, 55 per cent of the companies that export to the US believe that the Trump presidency will have a negative impact on their own performance. Among companies that do not export to the US, the figure is 34 per cent,” says Erdsiek.
Increasing Market Power of Large Digital Companies
The surveyed companies also believe that the renewed Trump administration will affect digital services and applications. “Almost two thirds of the companies expect the large digital companies to gain in market power in the wake of Trump’s election,” adds Professor Irene Bertschek, head of ZEW’s “Digital Economy” Research Unit. “Since the time of the survey in December 2024, this share may also have increased, given the large presence of several CEOs of major digital companies at Donald Trump’s inauguration in January 2025, as well as the massive investments in new digital projects announced by Trump,” says Bertschek. “But even at the time of the survey, only five to seven per cent of the companies in the information economy and the manufacturing sector thought it likely that the market power of the large digital players would diminish.”
Moreover, more than 40 per cent of the companies said they believe access to digital services and applications will become more difficult for the German economy under the Trump administration. Only around one out of ten companies said they expect access to improve. “Strengthening Germany’s and Europe’s digital sovereignty should therefore be a top priority on the political agenda,” resumes Bertschek.
About the study
Around 850 companies of the manufacturing sector and the information economy (ICT sector, media service providers and providers of knowledge-intensive services) participated in the ZEW survey which was conducted in December 2024. The findings presented here were derived from additional questions that had been included in the online questionnaire of the ZEW Business Survey in the Information Economy.
