RT-Engels: 23-04-2025,
The government has reportedly cut its GDP forecast in response to the US tariff hike and uncertainty over Washington’s trade policy
Germany is facing the third straight year of economic stagnation following the latest US tariff hike and growing uncertainty over Washington’s trade policy, Handelsblatt reported on Tuesday, citing an internal government forecast.
Earlier this month, US President Donald Trump imposed a 20% tariff on all EU goods and 25% on steel, aluminum, and car imports to address what Washington calls an unfair trade imbalance. While Brussels prepared 25% retaliatory tariffs, Trump later paused most new tariffs for 90 days to allow for negotiations. However, a 10% baseline tariff and the targeted 25% remain in place.
According to the report, Chancellor Olaf Scholz’s outgoing government has revised its 2025 GDP forecast for Germany to 0%, down from 0.3% in January. This would mark the first time in history that the EU’s largest economy has failed to grow for three consecutive years, after contracting in 2023 and 2024. The government expects a modest rebound in 2026, with growth now projected at 0.9%, down from an earlier estimate of 1.1%.
Data from the Federal Statistical Office shows that the US was Germany’s top trading partner last year, making the impact of tariffs particularly significant.
Sources say uncertainty over the tariffs has prompted German companies to delay investments until the situation becomes clearer, which led to the change in the projections.