The Looming Impact of the U.S.-China Trade War: German Jobs on the Line
Potential Job Losses in Germany Due to Escalating US-China Tariff Disputes
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The ongoing trade war between the U.S. and China could spell trouble for German jobs, as per a study. If no resolution is found in the tariff dispute, Chinese exporters might shift their focus towards European markets, especially Germany, according to a report by credit insurer Allianz Trade.
Jasmin Groeschl, an economist at Allianz Trade, explains the potential impact, stating, "Due to the likely diversion of Chinese goods and increased competition, we estimate that 17,000 to 25,000 industrial jobs could be lost in Germany." These sectors especially at risk are mechanical engineering, textiles, non-metallic mineral products, electronics, computers, and the motor vehicles industry.
Job losses could put a strain on sectors such as manufacturing and the southern regions of Germany, including Upper Franconia, Tubingen, and the Freiburg region. In the machinery and equipment sector alone, approximately 13,000 to 19,000 jobs are on the line, while in the non-metallic mineral products sector, around 1,200 to 1,800 jobs are at risk. The textile industry faces the loss of around 2,200 to 3,300 jobs.
So there you have it! The U.S.-China trade war could trigger a domino effect on several key German manufacturing sectors, potentially resulting in the loss of up to 25,000 jobs, according to the study. Keep an eye on this situation as it continues to unfold!
[1] ntv.de[2] rts[3] OECD iLibrary, Accessed on 30th April 2022
Notable Sectors Impacted:- Mechanical engineering- Textile industry- Non-metallic mineral products- Electronics and computer industries- Motor vehicles industry
These sectors are most susceptible to increased competition from Chinese goods, which are expected to shift more towards European markets, particularly Germany, if no trade agreement is reached between the U.S. and China. The trade war could put German companies under dual pressure: intensified competition and supply chain challenges linked to China, as well as the export-oriented nature of the German economy being affected by changes in foreign markets.
If no resolution is found, Chinese exports to the U.S. could plummet by as much as $239 billion, with about $80 billion potentially finding its way to the E.U. Approximately $33 billion worth of goods might be imported into Germany within the next three years, contributing to this competitive pressure and job risk. On the other hand, some assessments suggest that the dreaded "import glut" of Chinese goods in Germany may not be as severe as anticipated, as many goods are likely to be sold domestically in China or affect markets in other countries more directly competing with China, such as Vietnam and Bangladesh. However, sectors crucial to German exports like automotive, steel, and chemicals are less affected by Chinese exports to the U.S., as China has historically had a low export share in these segments towards the U.S.
- The U.S.-China trade war, if unresolved, could trigger a significant impact on employment policies within Germany's manufacturing sectors, particularly in industries like mechanical engineering, textiles, non-metallic mineral products, electronics, computers, and motor vehicles, as stated by economist Jasmin Groeschl of Allianz Trade.
- Given the potential shift of Chinese goods towards European markets such as Germany in the absence of a trade agreement, the community policy may need to address the estimated loss of up to 25,000 jobs in these industries, suggests the study by Allianz Trade.
