Business: Bundesbank: US tariffs threaten weak German economy

The Bundesbank warns of considerable stress for the German economy because of the threatened high tariffs of US President Donald Trump. If the announced sentence of 30 percent comes into force on imports from EU from August 1st, this would be a “considerable economic down risk” for the economy, the Bundesbank warns in its current monthly report. The German exporters threaten “additional headwind” by the US customs policy at short notice.

From the Bundesbank’s point of view, the German economy finds no way out of its crisis. In spring, the economy in Germany lost ride again, she writes. The gross domestic product may have stagnated in the second quarter.

In the first three months, the German economy was surprisingly grown by 0.4 percent because companies in anticipation of US tariffs preferred deliveries and jumped in industrial production. Now the advanced effects expired, according to the Bundesbank.

Brussels wrestles for solution

The EU Commission wants to avert an escalation in the customs dispute with the USA. Prepared billions of billions of against tariffs for US products are still holding back at the negotiating table in the hope of a solution. US President Donald Trump recently spoke of progress.

A US base inch of 10 percent currently applies to EU imports, and there are industry-specific tariffs such as 25 percent on cars and auto parts and 50 percent on steel and aluminum. The United States is the most important export market for Germany, around 10 percent of German exports are going there.

In June, the Bundesbank predicted a stagnation for the German Economy in 2025, but was based on a 10 percent US volume. In 2025, the German economy threatens the third year without growth in a row – this has never been the case in the history of the Federal Republic.

Nagel wants quick agreement – but not at all costs

Customs uncertainty is a shame of economic development, Bundesbank President Joachim Nagel told the “Handelsblatt”. A quick agreement with the USA must be the goal of the EU, although “not at all costs”.

The Bundesbank continues to see the economy in Germany in the basic tendency. The mood in the economy brightened up with the prospect of investing billions of investments by the federal government. A boost for the economy will only come to a delay.

At the same time, the industrial companies remained weakly busy, while consumers put their money together and the construction industry in the crisis. The labor market, on the other hand, has so far remained stable.

Institute: US tariffs painful, but manageable

Unlike the Bundesbank, the Institute for Macroeconomics and Economic Research (IMK) assesses the potential consequences of the US tariffs comparatively. A set of 30 percent on EU imports would put a strain on Germany’s economic recreation, but would not be fueling, according to a new study.

In June, the IMK experts from the Hans-Böckler Foundation close to the union predicted that the German economy would probably grow by 0.2 percent this year and 1.5 percent in 2026. If the new US tariffs reached 1st August, in 2025 a stagnation and in 2026 an increase of 1.2 percent would be expected, experts around Sebastian Dullia estimate.

Mechanical engineers record the US market

The German mechanical engineers are also positive. In a survey by the VDMA industry association among 936 companies, 31 percent rate their current sales opportunities in the USA as “very good” or “good”. A quarter, on the other hand, reports of poor or very poor chances. Similarly positive values only reach the region of the Middle East, while on the German market or in the China business the negative assessments predominate.