The new US tariffs, rising geopolitical tensions, and increasing protectionism are posing serious challenges for companies around the world—particularly in the DACH region.

Germany, Austria, and Switzerland are export-driven economies with globally integrated value chains. Their success stems not from resisting globalisation, but from fully embracing it.

Now, the latest tariff measures imposed by the US cast a long shadow over these countries' economic outlook. Margins are shrinking, order volumes are declining, and investors are growing uneasy.

So, what exactly are the consequences of these developments and how can the industrial sector respond? These are the questions we’ll explore in this blog post.

Framed as measures to protect national interests, the latest round of US tariffs targets a wide range of industrial goods, including steel, aluminium, vehicles, and machinery, particularly high-tech investment goods. For companies in the DACH region (Germany, Austria, and Switzerland), this has direct implications, particularly for those producing distinguishable physical goods such as equipment, machines, devices, vehicles, or high-tech components like drives, sensors, and pumps.

Germany remains by far the largest exporter of such goods. In 2023 alone, exports to the US exceeded €130 billion – nearly ten percent of the country’s total exports (source: Statista). Austria and Switzerland show similarly strong export dependencies, especially in mechanical engineering, electrical engineering, and medical technology. The new US tariffs of up to 31% now not only endanger key sales markets, but also threaten jobs, investment, and innovation capacity across European industrial organisations.

Not all challenges – or perhaps very few – can be solved single-handedly. Politicians also have a crucial role to play. Industry associations in Germany (e.g. VDMA, ZVEI), Austria (VDMA, IV), and Switzerland (Swissmem) are calling for targeted support, such as export subsidies, tax breaks, or focused investment incentives. Promoting industry through additional free trade agreements is also on the political agenda of these associations. These measures appear to offer medium to long-term potential, as demonstrated by the export success of countries like Denmark and Switzerland.

At the same time, diplomatic channels must be reinforced. The European Commission – and Switzerland’s foreign policy representatives – must advocate in Washington for a fair and sustainable trade framework. The recently revived transatlantic economic dialogue could play a key role in de-escalating tensions.

In recent years, domestic protection measures such as subsidies or stimulus programmes have proven insufficient to counteract structural changes. A proactive and agile approach – closely aligned with market needs, customer requirements, and emerging technologies – has proven far more effective in strengthening resilience. Long-term customer relationships depend on trust, consistent excellence, and clear strategic differentiation. We believe companies that embody these values, many of which are found in the heart of Europe, will continue to succeed.

Looking beyond the political sphere, one key success factor in today’s environment is often overlooked – the strength of regional industrial ecosystems. Especially in times of crisis, the benefits of being embedded in a reliable network of suppliers, technology partners, research institutions, and local service providers become apparent. Industrial clusters – in mechanical engineering, medical technology, or electronics – offer not only innovation potential, but also operational resilience with shorter lead times, higher transparency, and faster adaptation to new market demands.

Companies should therefore not only reassess their global value chains, but also actively invest in strengthening regional partnerships and collaboration structures. In a fragmented global environment, this can provide a distinct strategic advantage.

The new US tariffs present a serious threat to European industrial sector. Yet, as with many unpredictable events, they also represent an opportunity. At Zühlke, we believe that companies which take decisive action now by reevaluating strategies and entering new markets will not only survive but emerge from the crisis stronger.

The industrial history of Germany, Austria, and Switzerland is built on entrepreneurship, adaptability, innovation, and a global outlook. These virtues are more essential today than ever – and they are the key to a successful future in a more fragmented and volatile world economy.