Make Europe Great Again: German Industry Surges Despite Global Trade Tensions

Germany’s industrial sector posted a surprising boost in new orders this March, registering a 3.6 percent increase over the previous month. This is the strongest monthly growth since December, according to figures released by the Federal Statistical Office. The data came as a welcome surprise for analysts, who had expected only a modest recovery following February’s stagnation and a significant decline in January.

The German Federal Ministry for Economic Affairs attributed the uptick partially to accelerated ordering activity, prompted by concerns over looming U.S. tariffs. Some manufacturers rushed to place orders in anticipation of further trade restrictions introduced by the Trump administration, a move that appears to have temporarily inflated the data.

While the March numbers have raised hopes for stabilization, economic experts warn against overinterpretation. The improvement may be short-lived, as the global trade environment remains highly unpredictable and volatile, especially due to shifting U.S. policy and escalating geopolitical tensions.

Business Leaders Urge Swift EU Action Amid Global Uncertainty

At the Ludwig Erhard Summit, Wolfram Hatz, President of the Association of Bavarian Industry (vbw), issued a direct appeal to political leaders in Berlin and Brussels. He called on Chancellor Friedrich Merz to assume a leading role in defending and advancing the European economic model, borrowing rhetoric from across the Atlantic with the pointed slogan: “Make Europe Great Again.”

Hatz warned that Germany’s partners in Europe and abroad expect leadership from Berlin, particularly at a time when economic frameworks are under pressure. With the United States and China increasingly locked in a tariff-driven conflict, European nations are feeling the shockwaves. Both the U.S. and China are among Bavaria’s most critical trade partners, and deteriorating relations threaten local industries.

A study commissioned by vbw outlines three potential developments in EU-China relations. In the most likely scenario, the trade conflict intensifies but does not explode. Even in this moderate outcome, Bavarian exports could fall by 10 percent, amounting to a 45-billion-euro loss. The worst-case scenario, involving military escalation over Taiwan and a complete breakdown in EU-China trade, could cost Bavaria up to 40 billion euros in lost trade with China alone.

The Call for a Balanced European Response

Hatz emphasized that the European Union must respond with restraint rather than mirror protectionist measures. Instead of retaliatory tariffs, he advocates for new partnerships with emerging markets such as India, ASEAN, and Mercosur. Eliminating non-tariff barriers—such as incompatible standards, import quotas, and licensing restrictions—would help maintain Europe’s openness and competitiveness without escalating tensions.

The vbw also stressed the importance of completing overdue internal reforms. European leaders are being urged to focus on reducing bureaucratic burdens that continue to stifle innovation and expansion across the continent. According to recent surveys, more than half of German companies cite excessive regulation as a major barrier, followed closely by cybersecurity risks, high energy prices, and persistent labor shortages.

Many firms have already begun scaling back investment or exploring options to relocate operations abroad. The automotive sector in particular, a cornerstone of German manufacturing, is under acute pressure. Job cuts and site closures are already under discussion, underscoring the urgency of structural reforms.

Crisis Born at Home: The Role of Domestic Policy Failures

In addition to global headwinds, many business leaders argue that Germany is grappling with internal, self-inflicted challenges. Hatz was explicit in his critique: “All problems that Germany has created for itself must be solved in Germany.” He called on the Merz administration to address domestic inefficiencies head-on if German companies are to survive in increasingly hostile international markets.

High corporate taxes, outdated digital infrastructure, and a sluggish permitting system are frequently cited pain points. These issues compound the impact of global instability and hinder Germany’s ability to act as a resilient economic leader within the European Union.

European Growth Prospects Depend on Strategic Investment

Despite ongoing concerns, there are signs that policymakers are laying the groundwork for a more competitive Europe. The European Commission is preparing long-awaited measures to streamline regulatory processes and reduce red tape. Meanwhile, national governments are increasing infrastructure spending, which is expected to stimulate economic activity in 2026 and beyond.

In parallel, Europe is accelerating the development of a unified defense industry, which could serve as a significant driver of growth. By supporting cross-border defense contractors, the EU aims to strengthen both its security autonomy and its industrial base, particularly in Germany.

This effort coincides with broader ambitions to make Europe more self-sufficient in strategic sectors, including energy, semiconductors, and artificial intelligence—areas in which the continent has long trailed global competitors.

Outlook Remains Fragile Despite Temporary Gains

While March’s industrial performance offered a much-needed morale boost, experts agree that it does not signal a sustained turnaround. The positive figures were driven in part by preemptive behavior rather than underlying momentum. With U.S. trade policies remaining unpredictable and the threat of global economic fragmentation still looming, German and European industries remain in a delicate position.

Long-term recovery will depend not on short-term gains, but on political resolve, regulatory modernization, and coordinated action across the European Union. The call to “Make Europe Great Again” is more than a slogan—it reflects a growing consensus that the EU must assert itself economically while avoiding the pitfalls of isolationism.