According to Western experts, Germany would greatly suffer if Donald Trump’s potential presidency leads to a trade war between the United States and Europe, as Germany’s once-envied industrial strength could become significantly vulnerable. Republicans plan to impose a 10-20% tariff on virtually all imports, and a 60% or higher tariff on goods from China, arguing that such measures will boost domestic production in the U.S.
A report from the German Economic Institute (IW) indicates that, under a scenario where the Trump administration imposes a 20% tariff on EU goods, the eurozone—especially Germany—could see a 1.3-1.5% decrease in GDP by 2027 and 2028. Another study by the German Ifo Institute suggests that German exports to the United States could drop by 14.9% if the U.S. imposes a 60% tariff on Chinese goods and a 20% tariff on goods from other countries. German car exports could be hit particularly hard, potentially dropping by 32%, as well as pharmaceutical exports, which could fall by 35%.
If Germany’s economy continues to struggle, it could drag down the entire eurozone, where the private sector has already been declining for two consecutive months. Recent data shows the Purchasing Managers’ Index (PMI) rose slightly to 49.7 points in October from 49.6 in the previous month, just shy of the 50-point threshold separating growth from contraction. The main culprit is Germany, as its industrial giants face high energy costs and weak Chinese demand.
Translated and edited by L. Earth
