Decline in Southwest's Exports to the USA and China - U.S. and Chinese imports from Southwest experience significant decline
In the first half of the year, the export-oriented economy of Baden-Württemberg faced challenges as global trade disputes and economic slowdowns took their toll. The region's foreign trade stagnated, with a total of 122.4 billion euros in exports.
One of the most affected sectors was the trade with the USA, where exports decreased by around ten percent. This downturn was not a recent development, according to BWIHK Vice President Claus Paal, who stated that the export weakness to the USA began two years ago. In the current period, the decrease was only 0.51 percent from the previous year, indicating a slight improvement but still a cause for concern.
The pharmaceutical industry, the most important commodity group in bilateral trade between Baden-Württemberg and Switzerland, was hit hard, with a 13 percent decrease in exports to the USA. The mechanical engineering industry followed closely, experiencing a 12 percent decrease, and the automotive industry saw a 11 percent drop in exports to the USA.
However, not all news was negative. Exports to Switzerland increased by 19 percent, making it Baden-Württemberg's most important country of origin for imports. Growing exports to Spain (up 8.4 percent), Poland (up 6.1 percent), Austria (up 4.3 percent), Italy (up 2.8 percent), and France (up 1.2 percent) were also noted within the EU.
The changes in the US market, characterised by the rapid rise of new providers and more local production in the pharmaceutical sector and mechanical engineering, have contributed to the losses in the automotive, pharmaceutical, and mechanical engineering parts industries in Baden-Württemberg. Newcomers like Chinese vehicle manufacturers such as Nio, which is a first customer for technologies offered by German suppliers like ZF, have been a significant factor.
Auto sales in China decreased by 40 percent, primarily contributing to the decline in exports to China, where Baden-Württemberg's exports also decreased by more than 16 percent in the same period. This marks the second consecutive year of significant decline in exports to the USA, a trend that Baden-Württemberg's economy will need to navigate carefully in the coming months.
