FILE PHOTO: Cranes stand at a container terminal wharf as the sun sets over Bremerhaven, Germany, August 12, 2025. REUTERS/Leon Kuegeler/File Photo

By Maria Martinez

BERLIN (Reuters) -German exports are expected to slump 2.5% this year as the sector faces "massive pressure" from weakening global demand, higher domestic costs and rising protectionism, the BGA trade association warned on Thursday.

Citing a new survey, BGA president Dirk Jandura said the group's foreign trade climate indicator remains deep in negative territory, with many firms reporting stagnant or falling sales.

"The situation remains fragile," Jandura said. "Foreign trade will remain the engine of our economy only if policymakers act decisively now."

The BGA also foresees imports jumping 4.5% in 2025.

Jandura pointed to trade tensions with the United States and China, higher tariffs, stricter supply chain rules and tighter export controls as factors eroding competitiveness and piling on costs.

Headwinds caused by U.S. tariffs were one factor behind leading German economic institutes' decision this month to trim growth forecasts for 2025 for Germany's export-reliant economy.

Jandura said many of the latest U.S. tariffs were so high that they made business "simply impossible" for some German exporters, effectively shutting them out of the U.S. market.

The U.S. was Germany's biggest trading partner in 2024 with two-way goods trade totalling 253 billion euros ($277.84 billion).

Nearly 60% of respondents said they were directly or indirectly negatively affected by the measures, said the BGA.

Additionally, 67% of the companies surveyed cited high extra costs from reporting requirements, which Jandura said were gradually destroying Europe's competitiveness.

(Reporting by Maria Martinez, Editing by Miranda Murray)