German exporters struggle as the euro’s surge reshapes global trade
The euro’s sharp rise this year is putting pressure on German exporters. With the currency up over 12% against the USD, businesses face growing challenges in global markets. While cheaper imports offer some relief, the overall outlook for 2026 remains uncertain.
The euro’s strength has made German and European goods more expensive abroad. This squeeze on pricing power is cutting into profit margins and weakening competitiveness. Exports, a key driver of Germany’s economy, are now expected to grow by just 0.6% in 2024, totalling around €1.6 trillion.
For many companies, currency fluctuations have become a major business risk. Roughly one in three internationally active German firms now view exchange rate volatility as a core threat. Small and medium-sized enterprises (SMEs) are particularly exposed, as they often hedge currency risks only partially or on a case-by-case basis.
On the positive side, the strong euro has lowered the cost of imported raw materials, energy, and intermediate goods. However, this benefit is outweighed by broader challenges. High US tariffs and weak demand from China are further dampening prospects for German exporters heading into 2026.
The euro’s appreciation continues to erode margins and limit growth for German exporters. With global demand softening and trade barriers rising, the road ahead looks difficult. Businesses will need to adapt to sustain their position in international markets.
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