In the Barbie movie, the iconic doll faces a pivotal decision: opt for her trademark but impractical sky-high stilettos or embrace the down-to-earth comfort of the quintessentially German Birkenstock sandal?
Now, however, Barbie may have another consideration: price.
US President Donald Trump's sweeping tariffs are poised to inflate the prices US shoppers pay for many German products — from Birkenstock sandals to Paulaner beer and riesling wine. Trump's tariff offensive is testing relations between the two allies, threatening their two-way trade and risking major damage to an already limping German economy.
For German companies it will test whether US consumers — long willing to pay more for the renowned quality of the country's goods — can stomach even higher prices at a time when US policies threaten to spark a recession.
“Both European producers and US consumers will suffer,” said Rodger Wegner, president of the Association of Exporting Breweries, which represents German beer brands including Karlsberg, Lowenbrau and Radeberger.
Both European producers and US consumers will suffer.
— Rodger Wegner, president of the Association of Exporting Breweries
Germany, like most of the world, is now subject to a 10% tariff on its exports to the US. But a 20% rate is still looming despite a 90-day pause. The duties could not come at a worse time for Europe's biggest economy, with economists predicting the trade turmoil could put it on track for a third year of recession for the first time in its history.
The US was Germany's biggest trading partner in 2024, with two-way goods trade totalling €253bn (R5.5-trillion).
'Birkenstock, like many other companies, may pass the cost onto consumers through price hikes.
However, even with higher prices, the brand could still have an advantage as consumers prioritise spending on comfort and quality, said Jessica Ramirez, co-founder of the retail consultancy The Consumer Collective.
Birkenstock's best-selling Arizona leather sandals retail for between $130 (R2,487) and $350 (R6,695).
German brewers are in a similar dilemma. The US is the third-biggest market for German beer outside the EU. But production costs have risen sharply in recent years, Wegner said, and US beer drinkers would inevitably have to shoulder the tariff burden.
The US is also the biggest export market for German wines, with the sector earning around €63m (R1.37bn) there, about a sixth of total export sales, data from the German Wine Association showed. For Dr Loosen, a winery in the Mosel region known for riesling, which exports a third of its production to the US, the financial implications of Trump's tariffs appear unavoidable.
“It will be a bitter pill to swallow,” said Thomas Loosen, the company's co-manager. — Reuters
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