Will German companies outstrip us after Trump's tariff hammer?

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• German companies could benefit from the new US tariffs on Swiss products in individual sectors.
• A competitive advantage is conceivable in the machinery, medical and pharmaceutical sectors in particular.
• In the long term, however, the ETH economist expects hardly any noticeable macroeconomic effects.

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According to a Swiss economist, German companies could benefit from the high US tariffs on Swiss imports. While US President Donald Trump is planning 39 percent tariffs for Switzerland, the figure for the EU is "only" 15 percent.

"If the tariff difference remains, this would certainly provide a boost for Germany," Hans Gersbach, Co-Director of the Economic Research Center (Kof) at the University of ETH in Zurich, told the German Press Agency.

German companies would have a competitive advantage where they compete with Swiss companies, for example in areas such as machinery, medical devices, precision instruments or in the pharmaceutical sector. Their products would be significantly cheaper in the USA. However, many Swiss suppliers also have products that German competitors cannot replace, says Gersbach.

Negative effects would also be the result

The second advantage could be trade diversion. "For example, a German supplier that contributes to the finishing of a Swiss machine could benefit if the finishing is then carried out in Germany and exported from there to the USA," says Gersbach. Or Swiss companies that already have sites in Germany could relocate some of their production. "But it all takes time, people underestimate the complexity."

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There are also negative effects: "German suppliers to Swiss companies would also be affected if Switzerland exports less to the USA. If the Swiss economy were to weaken, that wouldn't be good for Germany either. After the USA, Germany is Switzerland's most important trading partner."

Gersbach's conclusion: "One or two German companies may therefore have a competitive advantage in certain areas, but the bottom line is that hardly anyone will be rubbing their hands in glee. There will be a small boost, but the overall economic effect of all the individual effects is unlikely to be significant."