Trump's plan to impose 30% tariffs on EU imports could slow Germany's GDP growth — IMK

Starting in August, the US plans to impose 30% tariffs on imports from the EU, which could slow Germany's economic growth by 0.25 percentage points this year and next. The IMK institute made this forecast, pointing to the negative impact of trade tensions on Germany's export-oriented economy. Previously, Germany's GDP was expected to grow by 0.2% in 2025 and 1.5% in 2026. However, due to the tariffs, these figures could fall to zero this year and to 1.2% next year.

The institute notes that increased government investment and defense spending may partially offset the negative impact of tariffs. Nevertheless, the United States remains a key market for German exports. Until last year, the US accounted for nearly 10% of all German exports.

According to a survey conducted by the VDMA association, more than half of German engineering companies do not expect sales to increase this year, and 30% predict a decline. At the same time, one-third of companies consider the North American market favorable. VDMA chief economist Johannes Hernandt says that 2025 will be a challenging year for most companies and that sustained sales growth may not return until 2026.