Finance
US tariffs of 30% would dent, not stop, German growth, says IMK
Published by Global Banking & Finance Review®
Posted on July 16, 2025
1 min readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on July 16, 2025
1 min readLast updated: January 22, 2026
US tariffs of 30% may slow German growth by 0.25%, with zero growth this year. IMK suggests public investment to mitigate risks.
BERLIN (Reuters) -U.S. tariffs of 30% on imports from the EU, planned by President Donald Trump, could cost the German economy about a quarter of a percentage point in growth this year and next compared with current forecasts, the IMK institute said on Wednesday.
Trump has said he will impose 30% tariffs on imports from the EU from August 1 if there is no progress on trade talks.
That would mean zero growth this year and 1.2% growth next year in Germany, Europe's biggest economy, according to the IMK institute.
This compares with its previous forecast for a recovery from the fourth quarter and average growth of 0.2% for 2025, rising to 1.5% next year, driven by a planned boost in public investment and defence spending.
"A rapid implementation of the planned public investment offensive could significantly reduce the economic risks in Germany," said the IMK.
"Growth losses in the U.S. would be far greater than in Germany," it said, adding the U.S. was until last year the most important export market for Germany with an almost 10% share.
(Reporting by Madeline Chambers, Editing by Miranda Murray)
US tariffs of 30% could cost the German economy about a quarter of a percentage point in growth this year and next.
The IMK institute forecasts zero growth this year and 1.2% growth next year for Germany.
The IMK noted that growth losses in the US would be far greater than in Germany.
A rapid implementation of the planned public investment offensive could significantly reduce economic risks in Germany.
Until last year, the US was the most important export market for Germany, accounting for almost 10% of its exports.
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