According to a study by IMK, the re-election of Donald Trump as US president could noticeably slow the growth of the German economy. The tariff increases announced by the Republican during the election campaign are not only likely to significantly dampen the US and global economies.
“German gross domestic product (GDP) could also be more than one percent lower in the first two years after the introduction of tariffs than without such a tariff escalation,” said the analysis by union-affiliated economists published on Thursday. This would also have knock-on effects on the domestic economy.
The researchers explained that the German federal government and the EU could temper the negative effect with short-term investment programs. Trump’s possible return to the White House concerns politics and business. The 78-year-old has announced new tariffs if he wins the November 5 election against US Vice President Kamala Harris of the Democrats.
Zollkonig Donald Trump
Trump has promised a 60 percent tariff on “everything” from China and tariffs of 10 to 20 percent on all other imports. IMK researchers led by Sebastian Dullien write that Harris is also not considered a supporter of free trade. However, extensive rate increases, as announced by Trump, are not expected from the Democrat.
The IMK experts go through different scenarios. Strong tariff increases against China and the rest of the world are simulated, as well as strong trade policy responses from China towards the US. “Such retaliation is to be expected after the experience of the US-China trade conflict during Trump’s first term.” It is remarkable “how hard the US economy will be hit in this scenario,” the report said.
The US economy would shrink significantly
At the end of 2025, almost a year after the assumed implementation of such tariffs, US gross domestic product would be almost 4 percent lower than in the scenario without new tariffs. “In the fourth quarter of 2026 it would even be more than 5 percent and at the end of the calculation period at the end of 2028 the loss of economic production would be just under 5 percent.”
What would make Germany’s economy even more difficult is that the setback looms at a time when the industry has not yet fully recovered from the energy price shock caused by Russia’s invasion of Ukraine and is already under pressure due to “China’s aggressive industrial policies ”. and the US”. “A new negative external shock could contribute to a consolidation of the current stagnation phase,” the IMK warns. The German economy is currently teetering on the brink of a recession.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
