According to Creditreform, a financial tracking agency, Germany is facing its worst wave of corporate bankruptcies in a decade, with 11,900 businesses going bankrupt in the first half of 2025. This represents a 9.4% increase from the previous year, impacting approximately 141,000 employees. The situation is compounded by an ongoing recession and uncertainty in global trade, particularly with the United States. Creditreform’s chief economist, Patrik-Ludwig Hantzsch, warns that the high level of insolvencies could trigger a series of chain reactions, worsening the economic outlook.
Further, a recent survey by the Ifo economic institute indicates that German exporters are increasingly pessimistic about their future due to trade policy uncertainties. The Ifo index, which measures export confidence, dropped to -7.4 points in June, signaling a decline in optimism about international market prospects. While German GDP grew by a slight 0.2% in the first quarter of 2025, weak global demand and uncertainty in trade policies continue to take a toll on its economy. According to the survey, the US was Germany’s top trading partner in 2024, with bilateral trade in goods totaling €253 billion (around $280 billion), according to official data.
Earlier this year, US President Donald Trump imposed 20% tariffs on all EU goods, with 25% on steel, aluminum, and cars. When Brussels signaled its readiness to retaliate, most of the levies were put on hold for 90 days to allow for negotiations. A 10% base tariff and the 25% targeted duties remained unchanged. The tariff threats from the US are still on the table, and an agreement between the EU and the US has yet to be reached. Klaus Wohlrabe, head of Ifo surveys, said that the uncertainty has lowered exporters’ expectations, with the respective index falling to -7.4 points in June from -5.0 in May. The index measures how optimistic or pessimistic German manufacturing companies are about their prospects for selling abroad over the next three months.