07/05/2025 - The global economy is faltering – no sign of recovery for German foreign trade. Instead of progress, there is disillusionment: German companies abroad are facing deteriorating conditions and growing uncertainty across nearly all global regions. The current AHK World Business Outlook (WBO) for Spring 2025 shows that the economic expectations of German businesses worldwide have collapsed. Particularly, the upheavals in US trade policy are putting global economic momentum under pressure. "The new US trade policy hits German companies at their foreign locations with full force," warns Volker Treier, Head of Foreign Trade at the Association of German Chambers of Commerce and Industry (DIHK). "The US trade policy and international reactions to it send shockwaves through the global economy – investors are losing trust in reliable framework conditions. The result: investments are being postponed or cancelled entirely, long-established trade relations are being reassessed."

Crisis Mode Instead of Progress – Business Climate Turns Negative Worldwide

The AHK World Business Outlook is based on feedback from around 4,600 German companies in over 90 countries, surveyed between 17 March and 14 April 2025. The survey period coincided with significant geopolitical upheavals – including Donald Trump’s so-called “Liberation Day” and its immediate consequences for trade policy.

The mood worldwide has turned pessimistic: only 19 per cent of companies now expect an improvement in local economic conditions, compared to 27 per cent in Autumn. The share of those expecting a deterioration rises to 33 per cent. "The global upheavals, from the US to Europe and Asia, are changing the rules of international business. This uncertainty among businesses should serve as a call to action for policymakers in Berlin and Brussels to enhance the competitiveness of their locations and establish new, reliable trade relations worldwide."

Unpredictable Course: US Policy Hits German Firms Hard

Worldwide, 60 per cent of German firms fear negative impacts of US trade policy on their local operations. Particularly noteworthy: following the so-called "Liberation Day," the share of businesses expecting negative effects worldwide increased from 56 to 69 per cent. In the US itself, a striking 85 per cent of German companies operating there anticipate restrictions resulting from US trade policy – more than in any other region globally. "The plan to protect the domestic economy with tariffs and to increase domestic production isn’t working. The protectionist and unpredictable trade policies in the US create significant uncertainty and dampen economic activities," says Treier.

"Trust in global market mechanisms is eroding – and with it, investment dynamics," Treier continues. This shift in sentiment is particularly evident in North America (USA, Mexico, Canada), where previous years often saw unbounded optimism. Investment plans are now collapsing. The US, traditionally a strong investment destination, stands out particularly negatively: only 24 per cent of firms plan to expand their investments (down from 37 per cent) – a sharp decline. The aim of attracting investments through the new US economic policies appears to be falling flat. Instead, 29 per cent are planning to reduce their budgets entirely. "The numbers speak for themselves: investment readiness is losing momentum, and new projects are increasingly being put on hold," says Treier. "Especially for SMEs, there is a careful scrutiny of where opportunities still exist."

Policy Rather than Demand: Risks Reassessed

For the first time in years, businesses cite economic policy conditions as the greatest business risk (49 per cent) – even ahead of weak demand (46 per cent). In the US, the picture is especially dramatic: seven out of ten companies see politics as the main problem.

Additional risk factors include a shortage of skilled workers (34 per cent), rising labour costs (33 per cent), and new trade barriers such as preferential treatment for domestic suppliers. Globally, 26 per cent of firms feel affected by this – in the US, an astounding 71 per cent.

The hesitance of firms is also evident in their investment and personnel plans: only 28 per cent of the companies surveyed globally intend to expand investments – while 21 per cent foresee cutbacks. Caution also dominates in employment: while 31 per cent plan to increase staff, 16 per cent expect reductions.

Global Challenges Persist – and Intensify in the Medium Term

Companies are not only focused on current stressors – they foresee an enduringly challenging environment for years ahead. Above all, trade conflicts and protectionist tendencies (64 per cent) are seen as critical challenges for the next five years. Specifically:

• Tariffs and counter-tariffs: 77 per cent see this as a primary issue
• Political influence on supply chains: 63 per cent
• Distortions of competition through subsidies and industrial policy: 32 per cent

Further structural challenges such as inflation and monetary policy (42 per cent), increasing fragmentation (40 per cent), as well as digital transformation and artificial intelligence (also 40 per cent) add to the concerns.

Global Trade Weakens – Global Growth Under Pressure

The International Monetary Fund’s (IMF) forecast underscores the economic situation: global growth for 2025 is projected at only 2.8 per cent – well below the long-term average of 3.7 per cent. Global trade is weakening as well: trade growth is expected to reach only 1.7 per cent in 2025 and 2.5 per cent in 2026 – further evidence of the global economy's continued lack of momentum. "Our businesses demonstrate remarkable resilience – but even the most adaptable business models face limits," warns Treier. "Policymakers urgently need to establish clear, reliable, and investment-friendly conditions – at home, in Europe, and globally."

AHK World Conference: Navigating Stormy Times

Coinciding with the publication of the WBO, the AHK World Conference 2025 begins in Berlin – the largest network meeting of the German Chambers of Commerce Abroad, spanning 150 locations across 93 countries. From 13–15 May, around 900 representatives from business and politics will discuss global challenges, particularly developments in the US and their implications for German firms. The focus is on international dialogue, seeking sustainable solutions, and new impulses for collaboration in an increasingly fragmented global economy.