America first – Germany first! Sentiments that prevailed in the US are now gaining ground on the other side of the Atlantic, in the country that has Europe’s largest economy and, more recently, was a reliable and outward-looking democracy. Now, it is the very same economy and democracy that are at risk. Of all European countries, Germany’s economy is the most dependent on the US, which makes it particularly vulnerable to the upcoming Trump presidency and, in turn, opens the doors for its own right-wing populism. 

Europe’s reaction 

In the weeks following the US presidential elections on 6 November 2024, a common sentiment in Europe was concern for the future. Gradually, another feeling emerged: frustration. It derived from the sense of helplessness of moderate and left-wing voters in Europe after seeing most Americans vote against the Democratic party and therefore against a more social future for both domestic and international policies. As the election results revealed, Democrats failed to deliver the message that most voters profit from social cohesion and a close-knit international community bound by the rules of international law.  

After frustration, indifference took over: the Americans are the masters of their own fate – let them reap what they sow! However, this perspective oversimplifies the interconnected world where markets and security are intertwined. Through NATO, Europe – and especially Germany – relies on troops, arms and American deterrence for its security, while globalised markets depend on trade agreements to avoid expensive supply chains. The indifferent attitude towards America’s politics also underestimates the capability and plans of the Trump administration. 

Trump 2.0: What to expect 

On the one hand, expectations of a second Trump presidency have a different tone this time around, given that his first term was not the catastrophe many anticipated. Yes, he tried to harm democratic institutions, but they held up. Yes, his foreign policy style was rough and brash, but in substance, he was less unconventional than his demeanour suggested. Experts and professionals – the “adults” in the White House – contained Trump, just as Congress, the laws, the courts, the Constitution, and the very realities of the global landscape did.  

Yet Trump’s second term will likely be much more drastic because of the lessons from his first term. The political initiative “Project 2025” supports this theory, along with Trump’s own threats to prosecute his political opponents, not to mention a Republican House and Senate that will give him almost unlimited power. During his first term, Trump proudly took credit for spearheading the development of COVID-19 vaccines; now he has plans to bring an anti-vaxxer into his cabinet. His foreign policy will continue to be full of uncertainty. The Trump administration will furthermore likely prioritise a withdrawal from the Paris Agreement again – a legally binding international treaty on climate change, which was adopted at the UN Climate Change Conference in Paris – as well as widespread immigration controls, higher tariffs, reduction in support for Ukraine and a more conditional approach to traditional alliances verging on an isolationist stance. Trump views the US goods trade deficit as a major issue and plans to tackle it with punitive tariffs, as he did during his previous term.  

Germany at risk 

While Europe will face collective challenges over the next four years, the impact on individual countries will vary. Germany’s economy will be the most vulnerable to the plans of Trump’s presidency. A big difference compared to the last Trump presidency is Germany’s economic condition when Trump comes into power. In 2016, Germany had a particularly strong economy, which made it nearly immune to the repercussions of the US at that time. However, already feeling the indirect effects of the war in Ukraine and the sanctions on Russia, Germany is now facing an economy in recession. The year 2024 is expected to be the second consecutive year with a shrinking economy, which would be Germany’s first two-year recession in over a decade. Austria, whose economy is very dependent on Germany, will face the same fate. Indeed, the Economist’s “Trump Risk Index” (TRI) anticipates that Trump’s presidency will have a noticeable negative influence on Germany’s economy. On a scale from zero (least exposure) to 100 (most exposure), the Index places Germany at 52.9: the third most exposed country in the worldwide ranking. Only Mexico and Costa Rica score higher.  

Why is Germany so vulnerable? The score takes three categories into account: trade, security and immigration. The numbers show that Germany’s high dependency on US security provision (TRI: 72.8) poses the highest risk after decades of underinvestment in national defence. On the other hand, it also reveals a high TRI score in trade (55.5) caused by a bilateral trade surplus, where Germany’s exports into the US are greater than its imports. The German steel, aluminium and automotive sectors are especially vulnerable due to an expected tariff rise by the end of 2025.  

The ramifications for Germany will be both economic and political. An ongoing recession in 2025 due to the Trump administration’s actions would lead to increased prices, while wages are unlikely to keep pace with inflation, resulting in an increasing number of the population struggling financially. A lowered GDP forecast for 2024 and 2025 after Trump’s victory puts even more pressure on Germany.  

Such economic pressures may bolster support for Germany’s populist parties, the far-right Alternative für Deutschland (AfD) and the left-wing Bündnis Sahra Wagenknecht (BSW). Both parties use nationalist, Eurosceptic, anti-immigration and pro-Russian rhetoric. After the collapse of the current government, the next elections, which will take place ahead of schedule in February, may produce similar outcomes to the elections in the US and Austria this autumn. A struggling population is more likely to be perceptive to populist rhetoric such as the promise to end the support for Ukraine, anti-immigration slogans or the creation of “us against them”.   

Lessons learned? 

Before electoral campaigns begin in earnest, Germany’s moderate parties need to take action to avoid a reflection of the American political outcome. In the upcoming election, citizens are likely to prioritize bread and butter issues. Inflation and higher costs of living incite doubt in the population, causing citizens to question where the government’s priorities lie: domestically or abroad. Those who have flown regularly are familiar with the emergency protocol: put on your own oxygen mask before helping others. From there, it is only a small step to wanting to put “Germany first”. This is most likely the reason why voters are questioning the EU and Germany’s support for Ukraine or why they are afraid of immigrants.  

However, the fearmongering of moderate politicians in the hope of making bordering racist and populist ideas their topic is not helping in the long run. Such election campaigns only drive more people into the arms of racist or populist parties. The independent US senator  Bernie Sanders warned a year before the Presidential election that it is crucial for the parties of the democratic middle to focus on what their core values are, to be authentic and to “see” the struggle of the ordinary people instead of trying to implement pieces of the agenda of populists. This applies to Germany now if politicians of the democratic middle want to do better than the American Democrats. Poll after poll revealed that inflation and rising living costs were among the most important topics for American voters. Yet the Democrats failed to address these concerns convincingly.  

The most important lesson for moderate German and European politicians is to take note of the financial hardships that inflation causes citizens and to take these problems seriously. German parties, limited by Germany’s legally binding debt brake, need to find a way to work around its limitations to relieve the population. This will be challenging because the debt brake is in the Basic Law of Germany and can only be changed with a two-thirds majority. Addressing this recognises the situation as an economic emergency. Using the instruments at their disposal to prevent price gouging – such as establishing strategic government petroleum reserves, which would be released in times of high petrol prices – Germany’s political parties can buffer the worst effects and the rising costs of living. Controlling inflation would, in turn, strengthen democracy.  

So far, none of this seems to be on the radar of Germany’s moderate political parties. There needs to be a credible promise that the economic policies of democratic parties will improve people’s living conditions. This is essential to stop a further rise of right-wing extremist parties such as the AfD. Otherwise, Germans will need to prepare for difficult times ahead.  

Hanna Obermüller – a student enrolled in the Master’s programme Peace and Security Studies at Hamburg University. She spent two months working as a trainee at the IDM.