"Germany, at risk of recession" - Minister of Finance: German exports to the US will decrease by 15%
Germany's acting Finance Minister Jörg Kukies warned that US President Donald Trump's tariffs could cause serious damage to the German economy and significantly increase the risk of recession.
"If things stay as they are, our exports to the US will fall by around 15 percent," Kukies said, citing data from the Munich-based Ifo research institute. "Our growth prospects will deteriorate and the risk of recession will increase."
Last week, Trump placed the European Union in the worst category of America's trading partners, hitting the bloc with a 20 percent tariff on all imports. If the tariffs remain in place, they would hit the German economy particularly hard; the U.S. is Germany's largest export destination outside the European Union.
Kukies rejected the idea that Washington has gained the upper hand in trade talks after announcing the latest tariffs.
“The willingness to negotiate existed long before the tariffs were announced,” he said. “I don’t see the U.S. gaining any major advantage.”
The minister also backed the European Commission's strategy of preparing tough countermeasures if talks fail, while offering to eliminate tariffs on industrial goods if the US does the same. "There is a broad consensus in German politics for this strategy," he said.
Kukies also noted the worsening sentiment in the US economy. "All the feedback we're seeing from American businesses and surveys is that the risk of recession is increasing. And in a recession, tax revenues tend to shrink, not grow," he said.
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