Nearly two-thirds of German engineering companies expect revenues to take a hit from U.S. tariffs, with almost half anticipating losses exceeding 10%, according to a new survey by industry

lobby VDMA.

In the poll of roughly 400 member firms, 47% reported a drop in U.S. orders since April, underscoring growing pressure on one of Germany’s most export-driven sectors.

“It’s not just the level of tariffs but the bureaucratic hurdles that come with them,” VDMA president Bertram Kawlath said at the association’s annual press conference on Tuesday. Only around a quarter of surveyed companies believe they can fully comply with U.S. requirements, he added, urging German and EU officials to push back against measures he described as counterproductive.

Tariffs, however, are only part of the strain on the industry. The lobby pointed to domestic regulatory burdens, a lack of structural reform, geopolitical tensions, rising global trade barriers, customer uncertainty and intensifying competition from China as key obstacles to recovery.

Kawlath said that improving business conditions in Germany and across Europe remains the most effective strategy to strengthen the sector against international rivals.

Despite the challenges, VDMA maintained its forecast for a 5% drop in real production this year. The group noted that fresh data suggest the decline could be slightly less severe, and projected a modest 1% return to growth in 2026. Photo by vicwag, Wikimedia commons.