Export business: German companies are even more dependent on the USA

Status: October 21, 2021 2:31 p.m.

The economy in China is cooling down, at the same time the US market is becoming more important for German exporters. But when inflation is high, the economy weakens there too.

By Klaus-Rainer Jackisch, hr

It is beige, a bit old and has long been available as a digital version in paperless form – but its importance has increased steadily in recent years: the “Beige Book”, the economic report of the US Federal Reserve, in which the twelve regional Central banks of the United States describe corporate sentiment and thus provide an overall picture of future economic developments. It actually used to be red and was called the “Red Book” when Arthur Burns, then US Federal Reserve Chairman and ambassador to Germany, launched it in the early 1970s. But meticulous observers found out that the cover is beige and not red – and that’s why the economic report has been called the “Beige Book” ever since.

Klaus-Rainer Jackisch

“Everything is missing”

It is published eight times a year, yesterday it was that time again: After that, the inflation rate in the USA will rise to 5.4 percent, while economic development will weaken somewhat over the next few months. Overall, however, the outlook for the near future remains positive, even if optimism is more cautious, according to the central bankers.

Carsten Brzeski, Chief Economist Germany of the Dutch ING Bank, sees the causes of this development primarily in delivery bottlenecks and a lack of supplies: “There is currently a lack of everything. There is a lack of manpower, there is a lack of raw materials and there is a lack of real estate. The job market is safe We are seeing in the US that many people have also retired early. ” And it is precisely these that are now tearing a gap in the labor market, which is driving up wages and additionally fueling inflation. The US economy could do better if it weren’t for these problems.

Transatlantic trade relations are recovering

These developments are also of great importance for German companies. Because in the past few months, dependence on the US economy has increased again. This is mainly due to the fact that the economy in China has cooled down and there are increasing tensions with Beijing, especially on trade issues, according to Brzeski: “The USA was before the pandemic, in the pandemic despite Donald Trump, despite trade wars the most important trading partner for us. We export more to the US than to China, and as the Chinese economy cools that will be even more important. “

It is therefore with relief in this country that the government in Washington is also increasingly interested in improving trade relations with Germany and Europe again. The relationship, which has been battered by the Trump administration, is to be put back on a constructive basis.

Just a few weeks ago, a joint US and EU trade and technology council was founded in Pittsburg. Among other things, it is about the supply of semiconductors and a common stance on China – a country that is increasingly viewed as an aggressor and is increasingly undermining trade guidelines. “We see this as an area for very fruitful cooperation because our interests and problems are currently the same,” said US Secretary of Commerce Gina Raimondo during the meeting.

Export economy in the field of tension

But the relationship with the USA is still not completely smooth: US President Joe Biden is under domestic political pressure – not only from the Republicans, but also from his own Democrats. He remains tough on trade issues, as ING banker Brzeski emphasizes: “Joe Biden may be nicer and friendlier in tone, but just as relentless as Donald Trump on the matter Donald Trump was smashed, is being repaired. “

The German economy is thus increasingly caught in the field of tension in international conflicts: While China is flexing its muscles at all levels and the country’s economy is cooling, its dependence on the USA is growing, while the economy there is also losing momentum and the Trade relations continue to have points of friction.

These developments should move the stock exchanges in the coming weeks – as well as another message in the “Beige Book”: In view of the situation in the US, the US Federal Reserve should slowly turn its monetary policy around, reduce its economic aid and bond purchases. That means: The golden times on the stock market could slowly come to an end. The color red would perhaps fit better, at least from the point of view of many investors.


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