German Economy Faces Risk from US Tariffs
(MENAFN) Germany could face economic losses of up to EURO200 billion by the end of 2028 if the United States maintains a 50 percent tariff rate throughout President Donald Trump's term, as outlined in a recent study by the German Economic Institute (IW), made public on Friday.
The United States holds the position of Germany’s top trading ally, with the total volume of traded goods reaching EURO253 billion (USD287 billion) in 2024, based on official statistics.
During the initial quarter of 2025, Germany recorded a trade surplus of EURO17.7 billion in its dealings with the US—the highest among all its trade relationships.
Additionally, data from the Federal Statistical Office indicated that exports to the US surpassed imports by nearly 75 percent.
The IW report projected that, between 2025 and 2028, Germany’s overall economic performance would be reduced by an average of 1.1 percent annually if the elevated tariffs persist.
Should the European Union respond with comparable retaliatory actions, the cumulative economic harm could climb to EURO 250 billion by 2028.
On Friday, Donald Trump wrote on Truth Social that the European Union was initially created “for the primary purpose of taking advantage of the US on trade.”
He further asserted that the EU is “very difficult to deal with.”
Trump also blamed the EU for enforcing detrimental trade rules, levies, and bureaucratic restrictions, and for initiating “unfair and unjustified lawsuits against American companies,” which he argued have led to a “totally unacceptable” trade imbalance.
The US Trade Representative’s office has estimated that this trade deficit currently amounts to roughly USD240 billion each year.
Citing a lack of progress in ongoing negotiations, Trump declared that he is urging the introduction of a 50 percent tariff on all products imported from the EU, to be implemented beginning June 1, 2025.
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