German machine tool orders grew in both Q1 and Q2 of 2026, rising 14% year on year in the first half. Production nevertheless fell 7%, as stronger orders had yet to translate into output. Aerospace and defence demand was particularly strong, while automotive remained a major concern. The United States continued to support exports, and France and India showed positive momentum; exports to China declined sharply. Domestic sales also remained weak. With capacity utilisation at around 75% and employment falling, the industry continues to face structural adjustment despite signs that demand has passed its low point.

Since September 2024, the Federal Reserve has begun cutting interest rates, aiming to boost consumption and investment, which positively impacts machine tool demand. However, a weaker U.S. dollar may erode Taiwan’s export competitiveness. Trump’s return to power and proposed high tariffs and currency interventions could trigger a new U.S.-China trade war, creating global economic uncertainty and challenges for Taiwan’s machine tool exports. While short-term recovery opportunities exist, long-term growth depends on leveraging AI and ESG trends to explore new markets and achieve technological breakthroughs.