The trade war between the US and China may result in significant job losses in German industry, according to a recent research report released by Allianz Trade on Friday.
The research says that if no agreement is reached in the trade dispute between Washington and Beijing, Chinese exporters will increasingly turn to European markets, particularly Germany.
Jasmin Groschl, senior economist at Allianz Trade, has projected in the report that 17,000 to 25,000 manufacturing jobs will be lost in Germany due to Chinese goods being directed specifically to the country and increased competition.
Groschl stated that especially mechanical engineering, textile industry, non-metallic mineral products, electronics, computer, and motor vehicles industry are at risk, which corresponds to approximately 0.2% to 0.3% of the total employment in the German industry.
He said the tariff war has disrupted global trade dynamics, putting German companies under pressure on two fronts: first, increased competition and supply chains that are closely linked to China, and second, the strong export-oriented German business model, which is increasingly affecting foreign markets.
Without bilateral agreements, according to Allianz Trade’s analysis, the loss of Chinese exports to the US could be as high as $239 billion.
Chinese companies will likely try to enter other international markets and could therefore export about $80 billion to the EU.
According to the study, if no agreement on tariffs can be reached, around $33 billion worth of goods could enter Germany in the next three years, and this could increase Germany’s total imports by 2.5%.