Economic policy change in the USA: how German companies are reacting

• Economic opportunities through US reforms: 44% of the German companies surveyed expect their US business to benefit from tax cuts, less regulation in the area of research and development (26%) and 24% each from relocation incentives and sustainably low-cost energy
• Key challenges: Unpredictability of US policy (69%), US tariffs (49%) and tax increases against foreign companies (37%)
• Relocation of production remains a marginal phenomenon: 80% continue to rely on "Made in Germany" - only 10% are considering relocating to the USA
• No pull to the USA: 21% are planning to set up new production facilities in the USA, but almost as many are thinking about withdrawing from the USA (19%)
• Diversification as a strategic maxim: 51% are evaluating new markets, including in Africa, South America or Eastern Europe; 20% want to focus on Asia
• Exit from the USA rather than exit from China: only 4% want to exit China due to the new US policy, but 19% plan to do so from the USA
• ESG commitment remains untouched despite the US turning away from it: 85% of the German companies surveyed are maintaining their ESG commitment - despite the presidential decrees already issued in the US and the calls for German companies to follow suit

In the course of the realignment of US economic policy, German companies with business activities in the USA see opportunities, but also challenges.

This is the result of the current company survey "Realignment of the USA - Perspectives of German companies" by KPMG Germany, which is published today.

In an international comparison, Germany has a significantly above-average corporate tax burden, a high degree of regulation and high energy costs. It is precisely in these areas that the German companies surveyed expect the measures adopted or announced by the new US administration to create business opportunities for them in the USA: in addition to the positive effects of corporate tax cuts in the USA (44%), around a quarter expect a reduction in regulation and thus more freedom in the area of research and development (26%), the sustainable availability of cheap energy in the long term (24%) - especially locally available fossil fuels - and the promotion of new business relocations (also 24%).

"The realignment of US economic policy opens up opportunities. German companies are keeping a close eye on developments, but are not making any rash, ill-considered decisions," says Andreas Glunz, Head of International Business at KPMG in Germany and head of the survey.

Almost half of the companies surveyed (44%) see the expected reduction in corporate taxes as the greatest economic advantage for their business in the USA. However, almost as many (37%) also fear tax increases, which could affect foreign companies in particular.

The new opportunities are also offset by the concerns of the German companies surveyed: More than two thirds of those surveyed by KPMG (69%) cite the unpredictability of US policy as the biggest challenge. The lack of planning certainty makes strategic location decisions and long-term investments more difficult, particularly the relocation of production facilities and new settlements. In addition, new US import tariffs are a burden for almost half of respondents (49%) in their global trade activities.

The business activities of German companies in other countries are also affected by the decisions of the new US administration: Around a seventh of respondents cite potential sanctions against China (15%) and the termination of the USMCA free trade agreement between the US, Mexico and Canada (13%) as the biggest challenges. In many cases, German companies produce in these countries and then export the goods to the USA.

The aim of the US tariffs is to encourage international companies to relocate their foreign production facilities used for exports to the USA. However, this is not yet apparent on a large scale: despite new tariffs on US imports, 80% of companies are not planning to relocate their production from Germany to the USA.

Only one in ten (10%) are considering such a move. Five percent, on the other hand, are considering relocating their US activities to other regions. Relocating their production from other countries to the USA also remains the exception with one to four percent per region.

As a consequence of the realignment of US policy, the German companies surveyed want to position themselves more broadly and reduce their dependence on just a few large markets. One in two (51%) are evaluating an additional entry into new target regions such as Africa, South America or Eastern Europe. 20% of the companies surveyed also want to focus on Asia.

The new US policy has not yet led to a strengthening of the attractiveness of the US location - not even in comparison with China: While 21% of the companies surveyed want to set up new production facilities in the US, almost as many (19%) are considering a complete withdrawal. In contrast, only 4% are considering leaving China in response to the increasing decoupling of the two largest economies, the US and China.

"To avoid a cluster risk in the US, the German economy is diversifying its business activities into new markets and regions. The relocation of production by German companies to the USA and German companies turning away from China, as intended by US policy, remain wishful thinking," explains Andreas Glunz.

Although the new US administration has taken a whole series of measures to end ESG practices - such as withdrawing from the Paris Climate Agreement or redesigning diversity programs - 85% of German companies are maintaining their ESG commitment. Only 12% of the companies surveyed plan to reduce their activities in the environmental area, 10% in the social area and 7% in the governance area due to the realignment of US policy.

"For German companies operating in the US, the question arises as to how they will deal with the sometimes conflicting legal frameworks in the US and the EU in the future. If the worst comes to the worst, there is a risk that the US activities of German companies will be decoupled," concludes Andreas Glunz.

To the business climate survey

KPMG AG Wirtschaftsprüfungsgesellschaft surveyed 166 decision-makers from German companies with business activities in the USA for the business climate survey "Realignment of the USA - Prospects for German companies". The survey was conducted between February 24 and March 28, 2025 and focused on the economic outlook of German companies in the US as well as their challenges and business opportunities under the new US administration.

Katrin Häbel
Head of Corporate Communications
KPMG AG Wirtschaftsprüfungsgesellschaft
T +49 69 9587 4228
khaebel@kpmg.com