Impact of New U.S. Tariffs on German Textile and Apparel Exports

Recent U.S. trade pol­i­cy changes intro­duce sig­nif­i­cant import tariffs—ranging from 10% to 50%—on prod­ucts from near­ly 200 coun­tries. The Euro­pean Union, includ­ing Ger­many, will face a 20% tar­iff on tex­tiles and appar­el. This devel­op­ment threat­ens cur­rent trade flows and forces a strate­gic reassess­ment for export-ori­ent­ed man­u­fac­tur­ers.

Germany’s Exposure

  • The U.S. is the lead­ing non-EU mar­ket for Ger­man tex­tile and appar­el exports, with €1.78 bil­lion export­ed in 2023.
  • Germany’s trade bal­ance in this sec­tor is tra­di­tion­al­ly import-heavy, but exports still account for over 40% of total trade vol­ume (€52 bil­lion in 2023).
  • Key export prod­ucts include out­er­wear, work­wear, tech­ni­cal fab­rics, hosiery, and shoes.

Scenario Analysis: Two Possible Futures

Scenario 1: Full Tariff Implementation (EU at 20%)

  • Ger­man exports to the U.S. decline by 16%, equiv­a­lent to a loss of €282 mil­lion.
  • Trade with Cana­da and Mex­i­co also shrinks due to sup­ply chain inter­link­ages.
  • How­ev­er, Euro­pean mar­kets absorb much of the loss, with an esti­mat­ed €500 mil­lion increase in intra-Euro­pean exports.
  • Export gains are also expect­ed in South Amer­i­ca and some Asian coun­tries, dri­ven by glob­al price shifts and redi­rect­ed trade flows.
  • Increased glob­al avail­abil­i­ty of Ger­man prod­ucts could low­er aver­age prices, enhanc­ing com­pet­i­tive­ness in new mar­kets.

Scenario 2: Tariffs Reduced to 15% for EU

  • U.S. exports increase slight­ly by 4% due to improved com­pet­i­tive­ness against Asian sup­pli­ers, who face tar­iffs up to 46%.
  • Qual­i­ty-dri­ven dif­fer­en­ti­a­tion ben­e­fits Ger­man pro­duc­ers.
  • Key EU mar­kets (e.g., Poland) would import sig­nif­i­cant­ly more, with Poland alone adding €70 mil­lion in demand.
  • South Amer­i­can mar­kets con­tin­ue to grow mod­est­ly, while Asian demand soft­ens due to lim­it­ed access to the U.S. mar­ket.

Strategic Outlook

Short-Term Actions

  • Close­ly mon­i­tor trade pol­i­cy shifts and con­sumer behav­ior.
  • Con­duct cus­toms impact assess­ments and explore ways to opti­mize tar­iff clas­si­fi­ca­tion and pric­ing struc­tures.
  • Con­sid­er accel­er­at­ing imports or rerout­ing sup­ply chains before new tar­iffs take effect.

Mid- to Long-Term Measures

  • Strength­en mar­ket diver­si­fi­ca­tion, espe­cial­ly out­side North Amer­i­ca.
  • Explore par­tic­i­pa­tion in free trade zones and pref­er­en­tial trade agree­ments.
  • Review trans­fer pric­ing and sup­ply chain tax expo­sure to pro­tect mar­gins.

Conclusion

While U.S. tar­iffs present real risks to Ger­man tex­tile and appar­el exporters, com­pa­nies with flex­i­ble, sce­nario-dri­ven strate­gies can not only reduce dis­rup­tion but poten­tial­ly tap into new, pre­vi­ous­ly under­uti­lized mar­kets. Ear­ly plan­ning and glob­al sup­ply chain adap­ta­tion are essen­tial.

Dis­claimer

This infor­ma­tion bul­letin has been pre­pared by Gherzi Ger­many to the best of our knowl­edge and pro­fes­sion­al judg­ment. It is intend­ed to pro­vide gen­er­al strate­gic guid­ance for the tex­tile indus­try dur­ing the ongo­ing PFAS tran­si­tion.

How­ev­er, Gherzi Ger­many assumes no lia­bil­i­ty for busi­ness, com­mer­cial, or strate­gic deci­sions made sole­ly based on this doc­u­ment. All guid­ance pro­vid­ed here­in should be viewed as direc­tion­al sup­port and does not sub­sti­tute for a detailed, com­pa­ny-spe­cif­ic eval­u­a­tion.

More detailed assess­ments, includ­ing oper­a­tional fea­si­bil­i­ty, finan­cial impli­ca­tions, and tech­ni­cal imple­men­ta­tion, can be devel­oped with­in the frame­work of a joint project tai­lored to the respec­tive stakeholder’s role in the tex­tile sup­ply chain.

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Impact of New U.S. Tar­iffs on Ger­man Tex­tile and Appar­el Exports
Gherzi Ger­many Bul­letin