several Dax groups achieving success despite facing trade tariffs
The US-China trade disputes and higher import tariffs have taken a toll on the financial health of German DAX companies, with the automotive industry bearing the brunt of the impact.
According to recent reports, the automotive sector has faced significant challenges due to tariffs up to about 27% on vehicles to the US. This has nearly halved exports in this segment, causing financial strain on German automakers. Despite recent partial trade agreements, automotive tariffs remain a critical burden, though some tariff exemptions for strategic products have been negotiated.
The ongoing US-China tariff tensions sustain global economic uncertainty and slower growth forecasts, which indirectly pressure German exporters and their profits. Wider macroeconomic assessments by organizations like the OECD and World Bank link the sustained tariff barriers and trade tensions to a dampening effect on global growth and business confidence, which in turn weigh on corporate earnings, including German exporters.
In the second quarter of 2025, the DAX companies still generated more revenue and more profit than the previous year, despite the economic slowdown and trade disputes. However, the revenue decline for the DAX companies was due to the challenging political and economic situation, particularly noticeable in the US and Chinese markets for many companies. RWE, Porsche, Mercedes-Benz, and BMW reported the strongest declines in revenue.
Despite the revenue decrease, 20 out of the 40 DAX companies reported an increase in profits. Siemens Energy reported an astonishing 1,553% increase in profits. The interim report for the second quarter showed clear signs of braking for some heavyweights on the stock exchange.
The employment situation in the DAX companies has also been affected. Fourteen companies reduced their workforce, while 20 had more employees than the previous year. As of June 30, 2025, a total of 3.49 million people were employed by the 34 DAX companies, which is around 30,000 fewer than a year ago.
EY expert Jan Brorhilker expects reduction in production capacities, up to plant closures and significant job cuts in the automotive industry. EY, a consulting firm, expects significant revenue losses for the export-oriented German industry on the US market due to higher import tariffs in the coming months.
In summary, the combined effect of US-China disputes and higher tariffs results in a challenging export environment for German DAX companies, especially automotive firms reliant on access to US and Chinese markets. Market analysts expect that unless broader trade agreements emerge and volatility drops, the overall environment will continue to limit revenue and profit growth for German DAX companies exposed to global trade. The recent EU-US trade deal offers some stability but maintains significant tariffs on vehicles, indicating continuing challenges.
The automotive industry, a key sector within the German business landscape, continues to grapple with the impact of US-China trade disputes and higher import tariffs, as evidenced by the financial strain on German automakers. This tough export environment, exacerbated by the sustained tariff barriers and trade tensions, is forecasted to persist, posing challenges for industry profitability and growth. The extended periods of economic uncertainty arising from these disputes are expected to affect the financial health of several DAX companies and could lead to further job losses, as suggested by EY expert Jan Brorhilker.
