Bremen's economic strain persists unabated
In the summer of 2025, the economy of Bremen, Germany, is grappling with significant challenges, primarily stemming from international trade tensions and tariff impacts. The steel industry and automotive sector, key pillars of Bremen's economy, are under severe stress.
The steel industry, notably the ArcelorMittal plant, is being severely threatened by a 50% tariff on steel imports imposed by the US. This tariff, coupled with uncertainty around tariff negotiations, risks potential layoffs and contributes to broader instability in steel supply chains. Nationwide, these chains could lose up to €10 billion by 2026.
The German automotive industry, including companies like Volkswagen and BMW, is also feeling the pinch. Increased US tariffs (15%, potentially rising to 30%) are causing export difficulties, leading to cost hikes, disrupted supply chains, and potential job losses.
Economic stagnation and investment strain are further complicating matters. The Bundesbank reports largely stagnant GDP with weak domestic and foreign demand in industrial products. The construction sector is also negatively contributing to growth. Energy import commitments, such as expensive US fracking gas, further burden Germany’s transition to carbon neutrality and add investment pressures that may divert capital away from innovation and local development.
Despite these challenges, there are some positive signs in Bremerhaven, particularly in retail, logistics, and some service sectors. The business climate indicator for retail in Bremen has increased significantly, reaching 104 points. Retail shows a slight recovery, with expectations for the coming months being more positive.
However, the business climate indicator for other services in Bremen decreases slightly to 84 points, with companies being cautious about investments and personnel planning. The order backlog is deemed insufficient by most respondents, and the current business situation in the hotel and catering industry in Bremen is still difficult and characterized by declining turnover.
The business climate indicator for manufacturing in Bremen drops significantly to 68 points, while the business climate indicator for wholesale and foreign trade remains at 74 points, indicating a difficult situation in these sectors.
Dr. Matthias Fonger, CEO of the Chamber of Commerce, expressed concern about the impact of the export slump on the Bremen economy. He believes that location conditions are hindering economic recovery and necessary investments and innovation.
In summary, Bremen's economy is facing a tough summer, with the steel manufacturing and automotive sectors under severe stress due to US-Europe trade conflicts. The challenges are compounded by broader national economic stagnation and energy-related investment challenges. However, there are signs of recovery in certain sectors, offering a glimmer of hope for the future.
The steep tariffs imposed by the US on steel imports, particularly affecting the ArcelorMittal plant, threaten the steel industry and pose a risk to potential layoffs, jeopardizing the financial stability of the sector.
The automotive industry, key players like Volkswagen and BMW included, are grappling with increased tariffs, resulting in cost hikes, disrupted supply chains, and potential job losses, putting financial pressure on this essential business sector.
