BERLIN, April 11 (Reuters) – In the midst of a pivotal scene in the Barbie movie, the iconic doll faces a difficult choice: wear her signature high heels or opt for the comfort of Birkenstock sandals. Yet, today, Barbie, along with many consumers, may have to contend with a new factor—price.
The U.S. President Donald Trump’s sweeping tariffs are set to drive up the cost of many German products, including Birkenstock footwear, Paulaner beer, and Riesling wines. These tariffs are not only testing the economic ties between Germany and the U.S. but are also threatening to inflict damage on Germany’s fragile economy, which is already showing signs of recession.
For German companies, the question now is whether U.S. consumers, long accustomed to paying a premium for German-made goods, will continue to do so amid higher prices. With a potential recession looming, the price increase could prove a significant burden.
Rising Costs and Uncertainty
Germany’s exports to the U.S. are currently subjected to a 10% tariff, though a further increase to 20% is still a possibility, despite a temporary 90-day pause. This comes at a particularly challenging time for Germany’s economy, which economists predict could face a third consecutive year of recession. The U.S. was Germany’s largest trading partner in 2024, with goods trade totaling €253 billion ($277.84 billion).
Rodger Wegner, president of the Association of Exporting Breweries, noted, “Both European producers and U.S. consumers will suffer,” as U.S. beer drinkers may soon feel the impact of these tariffs, which are set to increase production costs for German beer brands such as Karlsberg, Lowenbrau, and Radeberger.
Birkenstock’s Resilience and Strategy
As tariffs increase, many companies, including Birkenstock, are contemplating whether to raise their prices. However, the footwear brand declined to comment specifically on whether a price hike is imminent. That said, retail analyst Jessica Ramirez of The Consumer Collective suggested that Birkenstock might retain consumer loyalty even with higher prices, as shoppers continue to prioritize comfort and quality.
Despite a decline in shoe sales across the U.S. since Trump’s inauguration—down 9.5% from the previous year—Birkenstock has not reported any significant drop in demand. The company, which manufactures 95% of its products at its own facilities in Germany, emphasized its relatively low exposure to the tariffs due to its vertical integration. Birkenstock is pushing forward with its U.S. expansion, planning to open up to five more stores by the end of September, bringing its total to 15.
A company spokesperson stated, “We’re not going to alter our highly targeted retail expansion plans due to short-term disruptions.”
A Price Threshold for U.S. Consumers
For some American consumers, the decision to continue purchasing Birkenstock sandals may depend on price sensitivity. Clay White, a software engineer from North Carolina who has purchased three pairs of Birkenstocks, explained, “If they’re going to be … say over $200, then I would probably try and find a used pair. Or maybe I would purchase them in Europe.”
Birkenstock’s bestselling Arizona leather sandals currently retail between $130 and $350.
Impact on German Beer and Wine Exports
German brewers are also grappling with the tariff challenge. The U.S. remains the third-largest market for German beer outside of the EU, and the higher production costs caused by tariffs will likely be passed onto American consumers. The wine industry, particularly German Riesling producers, faces similar challenges. The U.S. is the largest export market for German wines, generating about €63 million annually—roughly a sixth of Germany’s total wine export sales. For producers like Dr. Loosen, a renowned Riesling winery in the Mosel region, the economic fallout from the tariffs is unavoidable.
“It will be a bitter pill to swallow,” said Thomas Loosen, co-manager of Dr. Loosen winery, which exports a third of its production to the U.S.
As the trade tensions escalate, it remains unclear how long German producers and American consumers will bear the brunt of these tariffs, and whether the long-standing affinity for German products will withstand the increased cost pressures.
