Zvei information 06/2025

German electrical and electronics exports up slightly after first quarter of 2025

Exports in the German electrical and digital industry rose by 7.1% year-on-year to € 21.9 billion in March 2025. "After a moderate decline in January and stagnation in February, this was the most significant increase in two years," said ZVEI Chief Economist Dr. Andreas Gontermann. "However, it is still too early to declare a turnaround, not least because of the possible negative effects of the erratic US tariff policy in the next reporting month of April."

The increase in March also had a positive impact on the trend in the first quarter as a whole. Here, industry exports totaled € 63.8 billion, exceeding the previous year's figure by 1.9%.

With year-on-year growth of 15.1% to €22.6 billion, imports of electrotechnical and electronic products to Germany saw double-digit growth in March. In the first three months of this year, aggregated electrical and electronic imports amounted to 67.2 billion euros, an increase of 7.5%.

German exports increased in March 2025 compared to the previous year.

German electrical and electronic exports to Europe increased by 8.4% year-on-year to 13.6 billion euros in March. Goods worth 7.0 billion euros were delivered to the eurozone - an increase of 7.4%.

Double-digit growth was recorded in deliveries to the UK (+24.2% to €1.1 billion), Spain (+17.9% to €819 million), the Netherlands (+16.1% to €1.4 billion), Switzerland (+13.2% to €735 million), the Czech Republic (+11.2% to €905 million) and Italy (+10.3% to €1.0 billion). Exports to Poland (+ 9.6% to € 1.0 billion), Turkey (+ 6.5% to € 362 million), France (+ 1.8% to € 1.3 billion) and Austria (+ 0.7% to € 851 million) were also significantly higher in March than a year earlier in some cases.

In contrast, a slight decline was recorded in exports to Hungary (- 0.6% to € 698 million). Exports to Russia, which have now been marginalized, fell again by 12.5% (to € 47 million).

In the first quarter of 2025 as a whole, industry deliveries to Europe rose by 2.9% to € 40.5 billion and those to the eurozone by 0.9% to € 21.4 billion.

The German electrical and digital industry delivered goods worth € 8.3 billion to countries outside Europe in March 2025. This was an increase of 5.2% compared to the previous year.

Industry exports to Taiwan (+ 60.3% to € 371 million), Hong Kong (+ 27.6% to € 220 million) and the USA (+ 11.2% to € 2.4 billion) all saw double-digit growth. "However, the latter are also likely to have benefited from pull-forward effects in order to avoid running into tariffs from April for the time being, as Trump's so-called Liberation Day had already cast its shadow in March," says Gontermann.

While electrical exports to Mexico (+9.8% to €265 million), India (+7.2% to €299 million), Malaysia (+7.0% to €201 million) and Brazil (+0.9% to €148 million) also grew in March. While deliveries to Japan (- 2.4% to € 243 million), Singapore (- 2.5% to € 167 million), China (- 5.9% to € 2.1 billion) and South Korea (- 12.9% to € 273 million) also grew in March.

In the first three months of this year, exports by the German electrical and digital industry to non-European countries totaled € 23.3 billion, 0.4% higher than in the same period of the previous year.

Customs policy

The General Agreement on Tariffs and Trade (known as GATT) came into force in 1948. It established rules for international trade and promoted collective tariff reductions. Almost 50 years later, the World Trade Organization (WTO), founded in 1995, took on the task of further reducing barriers and obstacles to world trade.

The initiator of global trade liberalization after the Second World War was the USA, which saw advantages for itself above all in a multilateral system. Between 1850 and 1900, tariffs on the value of goods imported into America were sometimes higher than 45%. In the 1930s depression years, they were increased again to 20%. After that, US tariffs were gradually reduced, not quite to zero, but almost.

In the meantime, tariffs seem to have become more acceptable again. The Biden administration has not only not withdrawn many of the tariffs introduced during Trump's first term of office from 2018 onwards, but has in some cases introduced more.

Tariffs now seem more hopeful again

There are five main arguments that tariff advocates regularly cite. They are all misleading.

Firstly, it is claimed that tariffs can boost domestic production and value creation and thus strengthen the economy as a whole. The empirical evidence for this alone is sparse. Since Trump imposed his first tariffs in 2018, the proportion of American industrial jobs has actually fallen. Although they have been able to push back import competition here and there, overall they have had a negative impact on the American production location. When foreign upstream producers are (or have to be) replaced by domestic companies, scarce resources, i.e. labor and capital, are diverted to protected sectors of the economy. The broader and higher the tariffs are, the more overall economic efficiency suffers.

The second - and much-used - argument that only growth in very specific sectors should be supported can hardly be substantiated with data. For example, an analysis by the US Federal Reserve found that Trump's targeted tariffs in favor of household appliance and car parts manufacturers at the time did, in isolation, lead to a slight increase in employment. However, the effect was then more than negated by retaliatory measures from abroad and higher input costs.

Thirdly, the US Trade Representatives under both Trump 1.0 (Robert Lighthizer) and Biden (Katherine Tai) have already propagated tariffs as a welcome means of exerting pressure in negotiations on trade agreements. This raises doubts. The US has been imposing stricter tariffs on imports from China for six years now. Despite this, the country had its highest trade surplus ever in 2024 - of almost one trillion dollars. Moreover, the argument is self-defeating: if tariffs supposedly bring national benefits, why use them merely as a bargaining chip? And if they were only a means of exerting pressure, would they be lowered or dropped again once an agreement had been reached?

Then, fourthly, there is the talk of high customs revenues. Yes, customs duties - like taxes - generate state revenue. However, a calculation along the lines of import value times planned general tariff rate equals expected revenue, the amount of which could then be used to reduce other taxes, falls short of the mark. Because it is static. After all, the tariff is intended to reduce the volume of imports, which means that the taxable base is partially eliminated. It also makes inputs from other sectors more expensive and invites retaliatory measures from abroad. The growth-damaging effects of a trade war mean less rather than more government revenue.

Fifthly and finally, tariffs can help to increase national security. They help to ensure that critical technologies are produced in-house. However, this argument is too often used as a cover for actual protectionism. For example, the first Trump administration justified tariffs on steel and aluminum from the EU and Japan with security concerns. That was not convincing. Ultimately, this raises the question: if something actually poses a threat to national security, wouldn't it be better to ban it straight away instead of simply taxing it?

Dates

contacts

Semiconductors Association
Lyoner Street 9
60528 Frankfurt am Main
Tel. 069/6302-276/-251
Fax 069/6302-407
e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.

Trade Association PCBs Components and Systems
Lyoner Street 9
60528 Frankfurt am Main
Phone 069/6302-437
Fax 069/6302-438
e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.