Germany Faces Economic Turmoil Amid Potential Trade Wars

Germany could suffer economically if tariffs are imposed by a potential Trump administration, as its industrial strength becomes a vulnerability. A study suggests German GDP could fall by up to 1.5% due to retaliatory trade measures with the U.S., while exports could significantly decrease.

Germany is bracing for economic challenges as potential tariffs loom under a Trump-led U.S. administration. A study by the German economic institute IW highlights that such a trade conflict could lead to a GDP slump of up to 1.5% if Europe retaliates with similar tariffs.

The U.S., having surpassed China as Germany's largest trading partner, could impose tariffs of 60% on Chinese goods and around 20% on others, severely impacting German exports. This, according to the Ifo study, could result in a 14.9% drop in exports to the U.S. and serious declines in the car and pharmaceutical sectors.

Experts warn that Germany's reliance on exports is under threat, with industrial production already suffering a downturn. Economic uncertainties could lead to reduced investment and consumer spending, and Germany may struggle to recover if global tensions continue to rise.

(With inputs from agencies.)