Germany's Economy Threatened by Huge Losses Due to Trump's Tariffs

SadaNews - The Kiel Institute for the World Economy predicts that the increase announced by U.S. President Donald Trump in tariffs on cars and trucks coming from the European Union will result in losses in German production of up to approximately 15 billion euros, equivalent to about 17.6 billion dollars.

According to Reuters, the institute pointed out that the German automotive industry has already incurred losses of billions of euros due to the U.S. tariffs imposed on imports in recent times.

In this context, the head of the Kiel Institute, Moritz Schularick, warned that the impact would be significant on the German economy, with long-term losses expected to rise to about 30 billion euros.

The analysis clarified that these tariffs will increase pressure on an industrial sector that is one of the key pillars of the German economy, at a time when it is suffering from slowing growth.

For his part, economist Julian Hintz explained that the new tariffs would clearly damage the growth rate in Germany, which is already suffering from weak economic performance.

The institute expects the German economy to record growth of no more than 0.8% during the current year, amid challenges including weak global demand and rising costs.

The warnings are not limited to Germany alone; the institute noted that other European countries with strong automotive industries, such as Italy, Slovakia, and Sweden, may also incur significant losses due to these tariffs.

This reflects the widening scope of the potential impact of the U.S. decision on the European automotive sector as a whole.

In response, Jens Zodikum, a senior advisor to the German finance minister, called for caution in dealing with Trump's statements, noting that the U.S. president often changes his positions regarding tariffs, according to Reuters.

He clarified that the European Union should wait for developments, emphasizing the need to clarify the reasons that prompted Washington to consider the trade agreement non-compliant, in order to avoid a broader economic escalation.