Within the Barbie film, the enduring doll faces a pivotal choice: go for her trademark however impractical sky-high stilettos or embrace the down-to-earth consolation of the quintessentially German Birkenstock sandal?
Now, nevertheless, Barbie could have one other consideration: value.
US President Donald Trump’s sweeping tariffs are poised to inflate the costs US customers pay for a lot of German merchandise – from Birkenstock sandals to Paulaner beer and Riesling wine.
Trump’s tariff offensive is testing relations between the 2 allies, threatening their two-way commerce and risking main injury to an already limping German financial system.
And for German firms, it’s going to check whether or not US customers – lengthy keen to pay extra for the famend high quality of the nation’s items – can abdomen even increased costs at a time when US insurance policies threaten to spark a recession.
“Each European producers and US customers will undergo,” mentioned Rodger Wegner, president of the Affiliation of Exporting Breweries, which represents German beer manufacturers together with Karlsberg, Lowenbrau and Radeberger.
Germany, like many of the world, is now topic to a ten% tariff on its exports to america. However a 20% charge continues to be looming regardless of a 90-day pause.
The duties couldn’t come at a worse time for Europe’s greatest financial system, with economists predicting the commerce turmoil might put it on monitor for a third yr of recession for the primary time in its historical past.
The US was Germany’s greatest buying and selling accomplice in 2024 with two-way items commerce totalling €253 billion ($277.84 billion).
‘A Bitter Capsule’
Birkenstock, like many different firms, could move the fee onto customers by value hikes, although it declined to say whether or not it deliberate to when requested by Reuters.
Nevertheless, even with increased costs, the model might nonetheless have a bonus as customers prioritise spending on consolation and high quality, mentioned Jessica Ramirez, co-founder of the retail consultancy The Shopper Collective.
A weekly survey by business affiliation Footwear Distributors and Retailers of America discovered shoe gross sales since Trump’s inauguration have been down 9.5% from the identical interval final yr.
Birkenstock, nevertheless, mentioned it has not seen any noticeable change in demand. It produces 95% of its footwear at its personal factories in Germany and mentioned its vertical integration makes it much less uncovered to tariffs than friends.
The corporate mentioned it was pushing forward with enlargement within the US – an important market – regardless of the present turmoil, with plans to divulge heart’s contents to 5 extra of its personal new shops there by the tip of September, for a complete of 15.
“We’re not going to change our extremely focused retail enlargement plans because of short-term disruptions,” a spokesperson mentioned.
Whether or not that technique pays off will seemingly come right down to customers like Clay White.
The software program engineer from North Carolina purchased his first Birkenstocks in 2011 and is now on his third pair, however a extreme value spike would make him assume twice about shopping for one other.
“If they’ll be … say over $200, then I might in all probability try to discover a used pair,” White instructed Reuters. “Or perhaps I might buy them in Europe.”
Birkenstock’s bestselling Arizona leather-based sandals retail for between $130 and $350.
German brewers are in an analogous dilemma. The US is the third-biggest marketplace for German beer exterior the EU.
However manufacturing prices have risen sharply in recent times, the Affiliation of Exporting Breweries’ Wegner mentioned, and US beer drinkers would inevitably need to shoulder the tariff burden.
The US can also be the largest export marketplace for German wines, with the sector incomes round €63 million there, a few sixth of whole export gross sales, information from the German Wine Affiliation confirmed.
For Dr. Loosen, a vineyard within the Mosel area recognized for Riesling, which exports a 3rd of its manufacturing to the US, the monetary implications of Trump’s tariffs seem unavoidable.
“Will probably be a bitter tablet to swallow,” mentioned Thomas Loosen, the corporate’s co-manager.
