Threatening trade conflict with the USA due to Trump tariffs: Flexibility as the key to success - Interview with Konrad Wolfenstein from Xpert.Digital

Global trade relations are once again being put to the test: Donald Trump is planning new tariffs on European imports, which poses major challenges for the German automotive and mechanical engineering industries in particular. In an interview with Konrad Wolfenstein, a renowned expert on the machinery and digital market, we shed light on the possible consequences of these protectionist measures and discuss strategies on how German industry can respond to them. Mr. Wolfenstein provides insights into concrete measures that companies should take to ensure their competitiveness and talks about the role of digitalization, diversification and political diplomacy in times of global uncertainty.

Konrad Wolfenstein

Question: Mr. Wolfenstein, Donald Trump is planning new tariffs on European imports, especially on German products such as cars and machinery. How should German industry respond to this challenge?

The impending tariffs undoubtedly represent a significant threat to the German export industry, particularly to mechanical engineering and the automotive industry. But every crisis also brings opportunities. German industry must adapt strategically and strengthen its competitiveness through diversification, digitalization and innovative business models.

Question: What specific measures do you recommend to mechanical engineering companies?

There are several approaches companies should take:

1. Diversification of export markets: German companies should reduce their dependence on the US market and focus more on other markets such as Asia, Africa or Latin America. Expanding trade relationships in high-growth regions can help offset losses in the United States.

2. Localization of production: Relocating production capacity to the USA could be a solution to avoid tariffs. Although this requires investment, it offers long-term benefits as companies are closer to customers and can better meet local market requirements.

3. Technological innovation: The use of technologies such as extended reality (XR) or virtual showrooms can not only reduce costs, but also strengthen customer loyalty. Virtual product presentations and training courses are an effective way to reach global customers, especially in mechanical engineering.

4. Optimizing supply chains: By using digital tools such as RFID or 2D matrix codes, companies can make their supply chains more transparent and efficient. This reduces costs and makes them more resilient to trade conflicts.

5. Intensify lobbying: It is important that industry associations such as the VDMA in the USA and the EU advocate for fair trading conditions. Stronger political cooperation is essential here.

6. Above all, it is important to understand the background of the long-term trade deficits in the USA that motivate Donald Trump to take his protectionist measures. A sound understanding of both sides of the coin – both the US economic motivations and the impact on German industry – is essential in order to respond appropriately.

Question: That sounds like a mix of adaptation and offense. But how can medium-sized mechanical engineers, who often have fewer resources, react?

Exactly, medium-sized businesses often have less leeway. But there are some targeted levers here:

1. Enter into collaborations: Medium-sized companies should form alliances in order to jointly manage larger investments, such as production facilities in the USA.

2. Use funding programs: German and European politics offer funding programs to support digitalization or export diversification. These possibilities are often underestimated.

3. Make value chains more flexible: Companies should diversify their supply chains in order to be able to react better to geopolitical risks.

4. Strengthen digital sales channels: Through online sales and digital platforms, companies can increase their reach and become less dependent on physical retail.

Question: How important is the role of digitalization in this context?

Digitalization is the key to future viability. It enables data-driven decisions, more efficient processes and personalized customer approach. Companies should increasingly rely on automation to reduce costs and compensate for the shortage of skilled workers. Predictive analytics can also help to identify market changes at an early stage and react accordingly.

Question: Should Germany also react politically? What do you think about counter-tariffs?

Countertariffs are a double-edged sword. They can put pressure on the US in the short term, but carry the risk of an escalation of the trade conflict. Instead, Germany and the EU should focus on diplomatic solutions and forge alliances with other trading partners. Closer cooperation with countries such as China or India could help to relativize the influence of the USA.

Question: Looking ahead, what are the long-term effects of such protectionist measures?

In the long term, the Trump tariffs could make German industry a catalyst for innovation and transformation. Our companies have always been strongest when faced with challenges. The current situation could:

• Accelerate the transformation towards greater sustainability.

• Increase the focus on high-end products that are in demand worldwide.

• Further expand your competitive advantage in digitalization and automation.

However, we must not forget that protectionism also destabilizes the global trading system. Politics and business must work together to set clear boundaries here.

Question: What long-term lessons should German industry learn from this situation?

The most important lesson is that you cannot become dependent on a single market - no matter how large or lucrative it is. Companies should also invest more in research and development in order to remain technologically leaders. Ultimately, Germany must become more attractive as a location, for example through better conditions for innovation and investment.

Question: Finally, is there any advice for German companies?

Flexibility is crucial. The ability to quickly adapt to new circumstances will determine success or failure. Companies should not only react to risks, but also proactively seek opportunities - be it through new markets, technologies or partnerships. Despite the challenges posed by possible Trump tariffs, German industry has many strategic options available. A clever mix of innovation, diversification and international cooperation is crucial.

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