Credit: Bernd von Jutrczenka/dpa
A second Donald Trump presidency could cause billions in economic damage in Germany, according to a study by the Cologne Institute for Economic Research (IW).
If re-elected, Trump has suggested he will impose tariffs of 60% or more on Chinese products and blanket tariffs of 10% on all goods imported into the US.
Over the course of a four-year term in office, this could mean a total loss of more than €120 billion ($130.3 billion) for the German economy, according to the authors of the study, which was published on Monday.
If China retaliates with its own tariff increases on US imports, this figure would rise further, the IW researchers say. Such a conflict would dampen global trade, while exports and private investment would fall in Germany. This would harm Germany and the European Union more than the United States.
In the more conservative scenario – in which China does not retaliate – Germany’s gross domestic product would be 1.2% lower in 2028 compared to a development without these extra tariffs.
As a consequence, the IW experts recommend using the time before a possible second Trump presidency for further agreements with the United States on steel and critical raw materials, and say the threat of countermeasures could help as a deterrent.
The EU also needs further free trade agreements, for example with Australia, the South American Mercosur states, Indonesia and India, the experts say.
