economic situation
Bundesbank: Trump’s tariff plans would hit Germany hard
Donald Trump has announced high tariffs on imports from Europe. This could have a noticeable impact on the already weakening German economy, warns Bundesbank President Joachim Nagel.
Bundesbank President Joachim Nagel fears serious losses in prosperity for Germany in view of the tariff policy announced by Donald Trump. “If the tariff plans are implemented, it could cost us one percent of economic output in Germany,” Nagel told the weekly newspaper “Die Zeit”. That is painful, especially since the German economy is not growing at all this year and will probably only grow by less than one percent next year. “If the new tariffs actually came, we could even slip into negative territory,” says Nagel.
US President-elect Trump has announced new tariffs of 10 to 20 percent on imports from Europe. Economists fear a trade war with the EU. If Trump actually imposes a 20 percent tariff on imports from the EU and a 60 percent tariff on imports from China, German exports to the USA could fall by 15 percent, estimates the Munich Ifo Institute.
Trump’s tariff plans would come at an inopportune time for the German economy. The federal government expects the gross domestic product to shrink slightly in 2024 for the second year in a row and only grow by 1.1 percent in 2025. The “Economists” are much more skeptical in their new annual report: The Council of Experts only expects mini-growth of 0.4 percent in the coming year and has thus significantly lowered its forecast.
Concern about the German labor market
Bundesbank President Nagel is also concerned about the German labor market. “The jobs we lose in industry may no longer be replaced by new jobs in the service sector as easily as before.” The level of employment is still exceptionally high. “But now the prospects have clouded over.”
dpa
Source: Stern
