(FILES) US President Donald Trump holds a signed executive order after delivering remarks on reciprocal tariffs during an event in the Rose Garden entitled "Make America Wealthy Again" at the White House in Washington, DC, on April 2, 2025. (Photo by SAUL LOEB / AFP)
Frankfurt, Germany: Germany's economy is expected to post zero growth this year, outgoing Economy Minister Robert Habeck said Thursday, blaming US President Donald Trump's sweeping tariffs.
"The US trade policy of threatening and imposing tariffs has a direct impact on the German economy, which is very export-oriented," he said, presenting the forecast.
The German government had previously expected slight GDP growth of 0.3 percent for this year for Europe's top economy, which shrank for the past two years.
It also cut its growth forecast for 2026 to one percent from 1.1 percent.
The United States is Germany's largest trading partner and last year took about 10 percent of its exports, from cars to chemicals.
Under Trump, it now levies a 10 percent tariff on European Union exports into the country, having earlier announced a 20 percent rate which was then paused.
"Tariffs and trade policy turbulence are hitting the German economy harder than other nations," Habeck said.
"We depend on open markets, functioning markets, and a globalised world," he told a Berlin press conference. "That's what has made this country rich."
German GDP shrank by 0.3 percent in 2023 and by 0.2 percent in 2024, as it was battered by higher energy prices following Russia's full-scale invasion of Ukraine.
It has also been hit by increasingly fierce Chinese competition in key industries such as automobiles and machinery.
"I would say that we are going through a paradigm shift when it comes to the basic earners for the German economy," Habeck said.
"Our big trade partners, China and the USA, and our neighbour, Russia, are causing us problems."
