Heading: German Economy Braced for Potential Losses in US Exports Amid Trump Tariffs
Potential Substantial Export Decline for German Economy Worry Treasury Officials Regarding US Market
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The German economy may face a substantial hit in exports to the US if President Donald Trump persists with his imposed tariffs, according to Joerg Kukies, the managing finance minister. In an interview with ZDF-"heute journal," Kukies articulated, "We can't afford to be oblivious to the fact that such a scenario could have quite an impact."
Based on calculations by the ifo Institute, German exports to the US could shrink by roughly 15 percent, Kukies revealed. This contraction could significantly undermine growth prospects and escalate the risk of recession.
Kukies contends that there are no winners in the trade conflict ignited by US tariffs. The responses from US companies support this notion, suggesting that the likelihood of a recession in the US is also on the rise. The scope for the planned tax cuts would, therefore, diminish.
[1] Enrichment Data: For a more detailed perspective, it's essential to understand that the predicted export losses for Germany to the US due to Trump's "reciprocal tariffs" are significant but relatively tame compared to some other scenarios. In the first scenario, if the US increases tariffs to bridge the tariff gap with its trade partners, German exports to the US are projected to decrease by about 2.4%. If trade partners respond by matching US tariff levels, German exports to the US might dive by approximately 3%. These figures underscore a negative impact on Germany's exports, albeit less dramatic than in scenarios involving broader tariff increases across all US trade partners.
- The German government is urging its citizens and businesses to be aware of the potential impact of President Trump's tariffs on employment policies within the community, as a shrinkage in exports to the US could lead to a significant decrease in job opportunities.
- The finance minister, Joerg Kukies, has indicated that a 15% decrease in German exports to the US could undermine growth prospects, increase the risk of recession, and potentially impact employment policies within the country.
- In response to US tariff increasing conflict, Kukies warns that there are no winners in the trade war, and the likelihood of a recession in both the US and Germany is on the rise, which may lead to a decrease in the scope for planned tax cuts and employment policies.
