Recently, a joint survey by Deloitte and the Federation of German Industries (BDI) found that U.S. tariff hikes are prompting German manufacturers to rethink their production footprints.
According to the report, 20 percent of German companies have already shifted part of their production abroad—a jump of 8 percentage points in the past two years. Looking ahead, 43 percent of firms plan to move facilities overseas within the next two to three years, up from 33 percent in 2023.
But it's not just production: 30 percent of respondents intend to relocate product development abroad over the same period, while 35 percent expect their research operations to take place outside Germany.
Europe remains the top destination, accounting for around 30 percent of planned relocations. Interest in Asia is rising: 16 percent of firms are eyeing the Chinese mainland and 19 percent are exploring other Asian markets.
Survey data also highlights cost pressures: 53 percent of companies report moderate rises in supply-chain costs due to tariffs, and 39 percent say they face severe or extremely severe cost hikes.
"Companies may achieve short-term savings by producing elsewhere, but this doesn't always translate into greater resilience," warns Juergen Sandau, a Deloitte supply-chain expert. "Disruptions in new markets can quickly eat into expected gains."
As protectionism intensifies, businesses must balance cost and resilience at a time when global supply chains are more fragile than ever.
Reference(s):
U.S. tariff hikes deepen pressure on German industry, survey shows
cgtn.com
