Ifo: Trump Tariffs Place Lasting Burden on German Economy
The German economic institute Ifo warned that President Donald Trump’s tariff policy will impose a lasting burden on Germany’s economy despite the trade deal reached between the European Union and the United States.
Lisandra Flach, head of Ifo’s Center for International Economics, said the duties deliver a triple shock by reducing German exports to the US, weakening Chinese demand for German goods, and pushing China to redirect more products to Europe, increasing competition.
Simulations by the institute show that continued US protectionism could cut German output by about 0.13 percent in the long term, with exports to the US expected to fall by 15 percent and to China by 8 percent.
Investment plans are also being hit, as 30 percent of firms have postponed projects in the US and 15 percent cancelled them entirely.
Pressure is concentrated in autos, machinery and pharmaceuticals, while the recent agreement offers only limited relief amid unpredictable US trade policy.
Lisandra Flach, head of Ifo’s Center for International Economics, said the duties deliver a triple shock by reducing German exports to the US, weakening Chinese demand for German goods, and pushing China to redirect more products to Europe, increasing competition.
Simulations by the institute show that continued US protectionism could cut German output by about 0.13 percent in the long term, with exports to the US expected to fall by 15 percent and to China by 8 percent.
Investment plans are also being hit, as 30 percent of firms have postponed projects in the US and 15 percent cancelled them entirely.
Pressure is concentrated in autos, machinery and pharmaceuticals, while the recent agreement offers only limited relief amid unpredictable US trade policy.
