Stronger strategies for tougher times

The re-election of Donald Trump as US president and the associated announcements, some of which are drastic, pose major challenges for German SMEs. While the global world order is being torn apart by agreements between Trump and Putin to end the war in Ukraine and the relativization of NATO's alliance commitments by his “vice president,” the economic consequences of planned or already implemented measures for German SMEs are coming into sharper focus. Despite all the justified fears, enomyc author Jan-Ulrik Holsten is convinced that those who set the right course now will not only be able to avert damage, but also focus on new opportunities.

Donald Trump, Mr. “Predictably unpredictable,” is back in the White House. The global political and economic impact of Trump's second term is hitting Germany at a time when many companies are already operating at their limits due to inflationary pressure, rising energy costs, and geopolitical uncertainty. The US president's America First policy is exacerbating an already tense climate.

German SMEs are feeling the effects most acutely. They are facing questions that threaten their very existence:

• Will global sales markets remain accessible?

• How will potential new trade barriers and tighter investment controls affect them?

• What consequences will the political and economic measures already decided or announced by the Trump administration have?

What is at stake is nothing less than a new world order in which the economic interests of the US are to be enforced bluntly and with drastic means. The effects go far beyond pure tariff policy. Whether it's energy supply, technological progress, or financial transactions, new restrictions and risks for German SMEs are looming in almost all key areas. Many owners, board members, and managing directors are rightly feeling uncertain. They are wondering what they can do to protect their companies and hold their own in an increasingly unpredictable global market situation.

What measures companies can expect

1. Drastic increase in import duties on industrial goodsThe US government wants to make imports of steel, aluminum, machinery, and automobiles—especially from the EU—more expensive by significantly raising customs duties. For German SMEs, this will mean rising costs and more difficult market conditions because their products will be less competitive in terms of price on the US market.

2. Tighter export controls for high-tech goods The US administration is also tightening restrictions on the export of technology products, particularly components for medical technology, electronics, and IT. This will lead to lengthy approval procedures and could make it more difficult to access US semiconductors, software, and patents.

3. Restrictions on US investment in Europe New regulatory hurdles and political “recommendations” are intended to discourage US investors from investing in European – and thus also German – companies. The aim is to keep capital in the US and strengthen the international competitive position of US players.

4. Stricter rules for awarding US government contracts In line with the “Buy American” motto, public contracts in the US are increasingly being awarded to US companies. German companies or their US subsidiaries must expect additional requirements, which will make access to the US government market significantly more difficult.

5. Expansion of subsidies for US industrial sectors Whether automotive, aviation or high-tech, numerous industries are receiving generous subsidies to further expand their production base in the US. For German SMEs, this means increasing competitive pressure from the US and the potential loss of their own customers to the US market.

6. Restrictions on energy exports “Drill baby, drill!” will not only boost domestic production. It is already foreseeable that US exports of shale gas, oil, and critical minerals to certain countries could be restricted, posing risks to Germany's energy supply.

7. Stricter regulation of technology transfer “Whoever saves their country breaks no law!” – Following this credo, it seems more than likely that the US government will further restrict technology transfers abroad on the grounds of national security. This would make research and development cooperation between German and US SMEs particularly difficult.

8. Tighter border and entry controls “What is our country if a judge can stop a Homeland Security ‘travel ban’?” Foreign employees of German companies working in the US in particular must expect more difficult visa processes. This affects teams of experts from IT, mechanical engineering, and engineering.

About the author

Jan Ulrik Holsten is a partner at enomyc, where he is responsible for sales and marketing. He is responsible for comprehensive turnaround and value enhancement projects as a consultant and interim manager. This article highlights a key solution approach and consulting portfolio that has proven to be a valuable lever for improving profitability and increasing competitiveness. Jan Ulrik Holsten also focuses on corporate profit improvement and working capital management. You can find out more about Jan Ulrik Holsten here .