The German economy faces increased challenges, with the head of the ifo Institute, Clemens Fuest, warning that new tariffs imposed by the United States could push German economic growth into negative territory given the current stagnation.
Experts from the Ifo Institute have highlighted that Germany will experience economic impacts through reduced exports to the US and potentially diminished exports to China, attributed to a decline in China’s competitiveness.
Furthermore, the pressure on German enterprises is expected to increase as countries like China seek alternative export markets, according to the institute’s analysis.
Key sectors within the German economy, particularly automotive and mechanical engineering, are poised to endure significant impacts based on the institute’s predictions.
Critics of the tariff strategy employed by former President Donald Trump suggest that the European Union should orchestrate a collective response. Clemens Fuest described this tariff move as the most significant assault on free trade since World War II.
On Wednesday, Donald Trump announced new 20% tariffs on imported products from the European Union, which add to the existing 25% tariffs on the automotive, steel, and aluminum sectors.
The tariffs are part of Trump’s strategy to bolster US industry while penalizing countries for what he claimed were long-standing unfair trade practices, imposing additional levies on imports from countries deemed particularly antagonistic in trade relations.
