Bloomberg Economics: US tariffs on car imports threaten Germany's economic recovery

According to estimates of the Bloomberg Economics experts, the US President Donald Trump's decision to impose 25% tariffs on all car imports may reduce economic growth in Germany by about 0.5% GDP. At the same time, analysts believe that the German economy's growth rate this year will amount to only 0.2%.

Germany has long relied on a relatively stable global trade environment, with exports playing a significant role in the country's GDP expansion. However, weakening global demand has already crippled its manufacturing sector, triggering a two-year-long contraction in German industrial production. As Bloomberg analysts note, the imposition of US tariffs will put additional pressure on the country's manufacturing sector.

However, the agency experts believe the situation may improve due to plans of the incoming Chancellor Friedrich Merz to allocate hundreds of billions of euros for defense, infrastructure and climate projects. But the positive effect of these measures is not expected to be seen until next year at the earliest. According to forecasts, economic growth in Germany may accelerate to 1.1% in 2026.

Bloomberg Economics summarizes that in the near term, the country’s economic recovery is still at risk due to trade tensions.