The results of a study published by the German Economic Institute (IW) showed that by 2028, Germany's GDP will lose at least 1.2% if Donald Trump becomes president of the United States again and increases import duties. According to media reports, in the event of his victory, Trump promised to impose 10% tariffs on all imports and increase duties on Chinese imports by 40 percentage points to 60%.
"Such a decision would temporarily reduce U.S. economic growth by 1%-1.4% in the early years, mainly due to higher consumer prices and unemployment putting pressure on consumption. But improving the trade and financial balance will allow US GDP to recover to be only slightly negative by 2028," the IW said, adding that the impact of higher tariffs on Europe and especially on export-oriented countries such as Germany will be much more serious.
"Germany's GDP will fall by 1.2% by 2028 due to a decline in exports and a subsequent drop in private investment. If China were to retaliate with its own 40 percent point hike in import duties, it could drop as far as 1.4%," the IW added, warning that the EU should prepare for such a scenario now and before the US presidential election (November 5) to try to strengthen trade relations with the United States.