The effects of Donald Trump's election victory on the German biotech and pharmaceutical industry are already proving to be severe.
Immediate export losses
German pharmaceutical exports to the USA are expected to plummet by 35%[1]. This is particularly critical as the USA is the most important sales market for German pharmaceutical companies – Bayer, for example, generates a quarter of its revenue there[7].
Financial dimension
According to the Institute of the German Economy (IW), the total damage to the German economy will amount to up to 180 billion euros in the next four years[8]. The pharmaceutical industry is among the most affected sectors.
Indirect effects
The effects go beyond direct export losses:
- German exports to China will decrease by 9.6% due to interdependencies in production chains[1]
- Even companies without direct US exports are affected as suppliers[8]
Compensation options
There are certain offsetting effects due to increased exports to other markets:
- Canada: +3.3%
- Mexico: +3.1%
- EU: +0.4%[1]
Company reactions
So far, only 4% of the affected companies are planning concrete adaptation measures such as relocating production to the USA or changing supply chains[9]. However, this could change once Trump implements his announced measures.
Long-term structural changes
German pharmaceutical and biotech companies must prepare for a fundamental reorientation of their US strategy. The previous business model with high export dependence on the US market will no longer work under Trump[2].
Sources:
[1] ifo Institute / EconPol Europe: German US exports could fall by 14.9% with a Trump re-election https://www.ifo.de/pressemitteilung/2024-09-23/ifo-institut-econpol-europe-mit-einer-wiederwahl-trumps-koennten
[2] New study: Donald Trump's election victory would hit German industry hard https://www.berliner-zeitung.de/wirtschaft-verantwortung/neue-studie-wahlsieg-donald-trump-wuerde-deutsche-industrie-heftig-treffen-li.2256647
[3] US election: Trump's election victory would mean hundreds of thousands in Germany… https://www.sueddeutsche.de/wirtschaft/trump-kamala-harris-exporte-auto-wirtschaft-inflation-lux.WqhKjZLtW5Cp9GzwNBLvR5
[4] US elections: Trump's tariff plans would severely affect the German economy… https://www.boeckler.de/de/pressemitteilungen-2675-trumps-zollplaene-wuerden-deutsche-wirtschaft-empfindlich-treffen-64207.htm
[5] US election – German companies fear Trump | tagesschau.de https://www.tagesschau.de/ausland/uswahl/trump-deutsche-wirtschaft-100.html
[6] US Election 2024: What Germany could face with Trump's victory https://www.finanzen.net/nachricht/aktien/weitreichende-folgen-us-wahl-2024-das-koennte-deutschland-mit-trumps-sieg-bevorstehen-13921796
[7] Trump and the pharmaceutical companies: The lesser of two evils https://www.wiwo.de/politik/ausland/trump-und-die-pharmakonzerne-das-zweitgroesste-uebel/14830496.html
[8] Donald Trump: Possible election victory worries German companies… https://www.manager-magazin.de/politik/weltwirtschaft/donald-trump-moeglicher-wahlsieg-sorgt-deutsche-unternehmen-handelskrieg-kann-deutschland-180-milliarden-euro-kosten-a-14707fb4-a5b1-4333-aa6b-0248e650a583
[9] German industry warns of negative consequences in the event of a Trump victory – ZDF https://www.zdf.de/nachrichten/wirtschaft/usa-trump-industrie-sorge-100.html
