According to an analysis by a Munich-based economic institute, Donald Trump's tariff plans on exports from abroad could cost the German economy dearly. Analysts also predict a new trade war with China.
German exports to the US could fall by almost 15% if Republican candidate Donald Trump wins the US elections in November, the ifo economic institute in Munich warned in a joint scenario with Econpol Europe.
According to the institute, a Trump victory would hit German exports to the US, with the automotive and pharmaceutical industries to be the worst affected. The expected decline in both industries is as high as one-third.
German exports to China are also expected to experience a knock-on effect and could fall by almost 10%, according to the analysts.
Germany would suffer if US-China trade war reignites, expert says
This comes as Trump announced tariffs of 60% on US imports from China and 20% from the rest of the world, which would make German products considerably more expensive in the US.
"If Trump is elected again, and a new trade war starts with China, Germany as an exporting nation would suffer greatly as a result," ifo trade expert Lisandra Flach said.
The experts' calculation does not take potential countermeasures by China into account. Should such measures take effect, the impact on Germany could be even greater, the economists said.
The US election takes place on Tuesday, November 5.
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