Companies in Lower Saxony express concern over potential U.S. import taxes - US businesses in Lower Saxony apprehensive about potential tariffs from the United States
Lower Saxony, a German federal state known for its thriving industries, is grappling with the impact of US tariffs in the ongoing EU-US trade dispute. A survey conducted by the Chambers of Industry and Commerce in Lower Saxony (IHKN) between July 31 and August 4 revealed that around two-thirds of the nearly 400 companies involved expect additional burdens such as higher tariffs or increased bureaucracy from the new deal.
The agreement in the trade dispute has not eliminated uncertainty for these companies. Economics Minister of Lower Saxony, Grant Hendrik Tonne (SPD), has expressed concerns about US trade policies, stating they burden the overall economy, including in Lower Saxony.
The survey findings indicate that 80% of companies still see their US business threatened by possible new trade restrictions. Of these, 14% intend to bear the costs themselves, which would reduce their profit margins.
Key impacts of US tariffs are evident in sectors such as steel and automotive, which are significant in Lower Saxony. Tariffs on nearly all European goods and services entering the US (15%) create higher barriers for German exporters, including those in Lower Saxony, reducing competitiveness and hurting sales volumes.
The Salzgitter steel group, headquartered in Lower Saxony, experienced a decline in order intake and sales in the first half of 2025, attributed partly to market uncertainty driven by US tariffs and the broader geopolitical tensions affecting investment decisions globally.
The automotive sector, important in Lower Saxony (e.g., Volkswagen Group), faced negative impacts from US tariffs despite showing some resilience through cost-efficiency measures and product renovations. Restructuring costs and tariff expenses weighed on financial results in early 2025.
Economic assessments from Bundesbank highlight that while US tariffs burden German economy segments, demand from other markets partially offsets this. However, ongoing uncertainty about tariff policy and US economic volatility keeps investment cautious.
Additionally, US tariff changes affecting low-value package shipments have caused German postal services to suspend shipments to the US, adding logistical challenges for businesses engaged in small-scale exports.
The EU and the USA reached a fundamental agreement on resolving the trade conflict at the end of July, with a tariff rate of 15% for most imports, including cars, semiconductors, and pharmaceutical products. However, tariffs on steel and aluminum remain at 50%.
In response to the survey, the ministry has confirmed concerns regarding the impact of US tariffs on Lower Saxony companies. Almost 60% of these companies expect significant trade setbacks. The IHKN views the internal market as still being plagued by numerous obstacles.
The CEO of IHKN, Maike Bielfeldt, stated that the mood among Lower Saxony companies doing business with the US is deteriorating rapidly. Many businesses in Lower Saxony are now focusing on other markets, particularly within the EU.
The US remains the third most important export market for Lower Saxony, with companies exporting goods and services worth 7.3 billion euros to the US in 2024, mainly vehicles and vehicle parts, machinery, and chemical products. However, the ongoing trade tensions and resulting tariffs are causing concern and challenging the growth prospects of these export-dependent sectors.
The ministry has not yet analyzed the IHKN survey in detail but confirms that new tariffs could create additional trade barriers. As the situation evolves, it is crucial for policymakers to address these concerns and work towards resolving the trade dispute to support the continued growth and competitiveness of Lower Saxony's industries.
The survey results reveal that a significant number of Lower Saxony companies anticipate additional burdens from the new trade deal, given the ongoing EU-US trade dispute and the implementation of US tariffs. These burdens are expected to particularly affect sectors like steel, automotive, and the broader economy, with possible ramifications for employment and profit margins within the state.
Given the threats to US business posed by potential new trade restrictions, the survey findings suggest that many companies are increasingly focusing on other markets, especially within the EU, as an alternative to the US. As a result, the ongoing trade tensions and resulting tariffs could challenge the growth prospects of export-dependent sectors in Lower Saxony, potentially impacting employment policies and the overall competitiveness of the region's industries.
