27 March | Euro

Bundesbank Board member says US tariffs will significantly slow German GDP growth

Bundesbank Board member says US tariffs will significantly slow German GDP growth

Tariffs of 20% on European exports to the US are likely to lead to a significant decline in the growth rate of the German economy. Meanwhile, the impact on inflation will be more difficult to assess, said Fritzi Köhler-Geib, member of the Bundesbank's Executive Board.

In her opinion, the European Central Bank's intention to make decisions depending on new data at each meeting is the right choice in the current situation. The US tariff policy is one of the elements justifying this approach. As Köhler-Geib explained, tariffs can have a wide range of consequences depending on details including Europe's response.

A little earlier, the Bundesbank had conducted a simulation of this situation. According to the results, a 20-point tariff increase in the US and a moderate response from the EU would lead to a noticeable loss of economic growth in both the United States and Germany. 

Köhler-Geib notes the likelihood of a slight uptick in the European country's GDP in the first quarter. However, she suggests that the economy is likely to stagnate again as early as the second quarter.

Brent sell
Period: 22.08.2025 Expectation: 395 pips
Brent fluctuates amid fundamental uncertainty
Yesterday at 11:25 AM 28
Period: 22.08.2025 Expectation: 1000 pips
0.9 level proved to be too high for AUDCAD buyers
Yesterday at 10:16 AM 33
Period: 22.08.2025 Expectation: 500 pips
Spiking US inflation pushes SPX down
Yesterday at 09:45 AM 21
Period: 15.08.2025 Expectation: 2000 pips
Selling AUDUSD with 0.6480 target
Yesterday at 09:45 AM 18
Period: 22.08.2025 Expectation: 2085 pips
GBPUSD rises amid improved UK economic conditions
Yesterday at 07:14 AM 22
Period: 21.08.2025 Expectation: 1455 pips
Selling USDJPY with 145 target amid growing expectations of BOJ rate hike
14 August 2025 45
Go to forecasts