An escalating trade war, which may occur if Donald Trump is re-elected for a second term as the US president, could mean a loss of billions for Germany’s economy, according to a report. With the 2024 US elections drawing closer, speculation of an escalating trade war between the EU and US is growing, especially if former president Donald Trump is elected again. This could significantly impact Germany, as the US is one of the country’s biggest trading partners.
This is mainly because Trump has already shared that tariffs on US imports may be hiked up to 10% or potentially even 20%, should he come back into office. A report by the German Economic Institute (IW), shared with Euronews Business in an email, outlined how a rising trade war could hit Germany in two potential scenarios. The first scenario outlines what would happen if Trump raises tariffs on all US imports to 10%, and tariffs on goods imported into the US from China to 60%, starting from 2025.
In this case, it is likely that the EU would also retaliate with a tariff of 10% on goods imported into the bloc from the US. The second scenario highlights an even more serious trade war, where both the EU and the US impose tariffs of 20% on each other. The value of German exports to the US amounted to about $171.
65bn (€158.75bn) in 2023, according to the United Nations Comtrade Database. In 2022, some of the key German goods imported by the US were packaged medicines, cars, blood, vaccines, antisera, cultures and toxins.
