Following President Donald Trump’s announcement regarding new tariffs on the European Union, the Munich-based Ifo Institute has issued a warning about declining economic growth in Germany throughout the current year, particularly if the EU responds with its own tariffs on American products.
Ifo President Clemens Fuest told “Bild am Sonntag” that if this escalation leads to a full-blown trade war, Germany risks entering a recession in 2026.
According to Trump, the US intends to increase the tariff placed on car and truck imports from the European Union into America from 15% to 25%. Fuest noted that these tariff increases would hit the German auto industry, which is already struggling.
In response, Professor Jens Südekum, an advisor to the Federal Ministry of Finance, advised Brussels to consider “appropriate countermeasures”. He suggested that the EU should initially wait and carefully observe whether the proposed increased tariffs will actually be implemented.
