Economists worried

Germany not prepared for Trump’s tariff club

Trump's tariff plans are probably just the first example of how he will shake up the global economy.

(Bild: AP/Evan Vucci)

With US President-elect Donald Trump, a different economic wind will blow internationally in the future. With corresponding consequences for Europe too. Economists believe that Germany, for example, is simply not prepared for the Trump presidency.

In an analysis published by the Ifo Institute on Wednesday, 85% of the 180 economics professors surveyed in Germany said this. Almost 90 percent fear that US trade policy under Trump will have a negative impact on growth.

"The German economy is heavily export-oriented and will therefore be hit particularly hard by Trump's planned protectionist trade policy," said Ifo expert Niklas Potrafke.

Trump wants at least 25 percent tariffs - on everything
Trump has already announced tariffs of 25 percent on imports from neighboring countries Canada and Mexico, while China is to be hit with additional tariffs of ten percent. "This suggests that he will also use tariffs as a means of exerting pressure on the EU," said Christian Dustmann, economist and director of the Berlin-based Rockwool Foundation.

"For example, to get the EU to go along with his expected course against China." This would put Germany and the European Union in an unpleasant dilemma.

Stronger US growth expected
More than 40 percent of participants in the Ifo survey expect Trump to ensure stronger US growth. By contrast, eleven percent of economists see very negative consequences for economic growth in Europe, while the figure for Germany is 20 percent. The USA is by far the largest buyer of goods "Made in Germany": almost ten percent of German industry's export turnover comes from US business.

In addition to the impact on economic growth, the experts were asked about the consequences for individual areas of international cooperation. "Here, too, the picture was extremely pessimistic," according to the Ifo Institute.

More than 90 percent of participants expect the conditions for measures to combat climate change, trade policy and cooperation in international organizations to deteriorate as a result of Trump's election.