“Terror” in Berlin for Trump: €150 billion loss in Germany since possible re-election

“Terror” appears to cause in circles of her economy the possibility of re-election of Donald Trump in their presidential chair While today the U.S. Supreme Court gave green light to Trump’s nomination, the Institute of German Economy (IW), published a study, according to which a second “season” Trump” in the US could cost the German economy up to 150 billion euros If Donald Trump becomes president of the US for the second time, this will have serious consequences for the German economy, the same investigation notes. The planned import duties could mean a total loss of up to EUR 150 billion for the German economy over a four-year term. This shows a new study of the German think tank (IW). In case of renewal of the Trump Presidency, a minimum duty of 10% on imports from all countries and up to 60% on Chinese imports is considered possible. This would be a serious blow, especially for German companies exporting to the US, as the US is one of the most important trading partners, especially for the car industry, but also for many other sectors. US tariff increases will have enormous consequences for Germany In a simulation, the IW assessed how the increase in tariffs would affect the economies of the US, Europe and Germany. The loss of GDP in Germany will likely amount to more than EUR 120 billion throughout Trump’s tenure. Should China resist this US trade policy and increase tariffs on US imports by 40%, this will likely cost the German economy 150 billion euros. The main reason for this is that tariff shock will also limit world trade and that private investment will be reduced in Germany except for exports. The EU must act urgently, according to the IW. The EU should use the remainder of President Biden’s term of office to put trade relations with the US on a more stable basis through agreements on steel and critical raw materials. Threatening countermeasures could also be a way to stop Trump from increasing tariffs. Finally, the EU needs further free trade agreements, for example with Australia, Mercosur, Indonesia or India. This is the only way in which it can mitigate the consequences of a protective US trade policy, points out the IW.