Heading Out the Red Flags: US-China Trade War Risks German Jobs in Key Sectors
Potential hazard for German employment due to escalating US-China trade disputes
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A potential showdown between the economic juggernauts, the US and China, could trigger a wave of job losses in Germany, according to a report by credit insurer Allianz Trade.The looming tariff dispute between the nations might prompt Chinese exporters to increasingly target the European markets, particularly Germany.
Jasmin Groeschl, the economist at Allianz Trade, forecasted that if there were no mutual trade agreements, up to 25,000 industrial jobs in Germany could be at stake. Among the industries most at risk are mechanical engineering, textiles, non-metallic mineral products, electronics, computers, and motor vehicles1. These job losses together represent roughly 0.2% to 0.3% of the total employment within the German industry, which numbers approximately eight million people.
The manufacturing sector and specifically the regions of Upper Franconia, Tübingen, and the Freiburg district, may bear the brunt of these job losses. Job cuts may impact about 13,000 to 19,000 jobs in the machinery and equipment sector itself, while around 1,200 to 1,800 jobs in the non-metallic mineral products sector and approximately 2,200 to 3,300 jobs in the textile sector hang in the balance.
The threat of job losses raises concerns about the stability of Germany's export-oriented industrial model, as the nation could face increased competition from the surging flow of Chinese goods into the German market. Estimates put this influx at approximately $33 billion over the next three years, with German imports ballooning by approximately 2.5% as a result1[5].
So, buckle up, folks. Despite the seemingly distant US-China trade war drama, its potential ripple effects could leave German industries reeling and affecting more than just the balance sheets—it may shake up our everyday lives too.
[5]: Allianz Trade Report, various sources
- The US-China trade war could potentially affect Germany's community policy and employment policy, as up to 25,000 industrial jobs might be at risk, especially in sectors like mechanical engineering, textiles, electronics, and motor vehicles.
- The influx of Chinese goods into the German market, estimated to be around $33 billion over the next three years, could significantly impact the finance sectors of industries, as the trade war could lead to increased competition and potential job losses in non-metallic mineral products and textile sectors as well.
