Germany’s economy will not grow in 2025, the government said Thursday, scaling back a previous prediction as President Trump’s tariffs bite into Europe’s largest economy, leaving it stagnant for the third year in a row.
In January, the German government had predicted 0.3 percent economic growth, but Mr. Trump’s tariffs of 25 percent on imported automobiles, steel and aluminum threaten to hit Germany’s export-oriented economy hard, as might the turbulence in the markets caused by the yo-yo nature of how the tariffs have been imposed.
“The German economy, which is already suffering from weak foreign demand and reduced competitiveness, is particularly affected by the U.S. trade policy,” Robert Habeck, Germany’s economy minister told reporters in Berlin on Thursday.
A new German government take power after the expected next chancellor, Friedrich Merz, is sworn in on May 6. He has promised to spur growth, aided by looser borrowing limits which will allow it to spend heavily on defense and infrastructure.
