The United States is increasingly becoming the destination of choice for German mechanical engineering companies. The sector's export share to the US has been steadily growing in recent years: from 11.5% in 2021 to 13.7% in the first three quarters of the current year. Conversely, the share of exports to China has steadily declined over the same period, likely reflecting efforts to reduce dependency on the People's Republic and its economic and hegemonic ambitions.

For Germany's leading industrial employment segment, the guiding principle has long been clear: Go West! This holds true despite Donald Trump’s re-election as president and his recurring threats of imposing 10–20% tariffs on all imports. According to an engineering association VDMA survey, most German plant and equipment manufacturers expect such tariffs to have a significant or very significant impact on their competitiveness. Yet, the sheer size of the US market remains irresistible. A large majority of German mechanical engineering firms plan to expand their US operations, or establish a presence there for the first time, within the next five years.

However, amidst the excitement over the US's push for reindustrialisation, and the promise it holds for the German and European capital goods industries, caution is warranted. Overreliance on the United States could pose risks. For one, the trajectory of Donald Trump’s economic policies remains uncertain. Analysts from the Peterson Institute for International Economics, for instance, warn of significant burdens on American consumers from tariffs, which could ultimately hurt US industry as well.

Moreover, emerging markets like India and Mexico also present compelling opportunities, boasting large domestic markets and increasing industrialisation. According to the VDMA, subsidiaries of German mechanical engineering firms in India are currently brimming with confidence.

Amid ongoing global economic pressures and expected production declines in German mechanical engineering, it would be almost negligent for companies to ignore such developments. Now more than ever, the export-oriented sector must prioritise one strategy: diversification.