Economic Forecast and Challenges
Germany's economy is projected to stagnate in 2025, with zero growth expected, due to the impact of U.S. President Donald Trump's trade policies, as stated by outgoing Economy Minister Robert Habeck.
The German government had previously anticipated a slight GDP growth of 0.3% for 2025, but has now revised its forecast downwards, also adjusting the 2026 growth prediction to 1% from 1.1%.
Trade Policies and Global Competition
Trump's tariffs, including a 10% duty on all imports and 25% levies on cars, aluminum, and steel, have particularly affected Germany's export-oriented economy, hitting major sectors like automotive and pharmaceuticals.
In addition to trade tensions with the U.S., Germany faces challenges from fierce Chinese competition in key industries such as automobiles and machinery, further complicating its economic recovery.
Government Response and Future Outlook
Habeck has expressed hope that a new spending package worth hundreds of billions of euros could help revive the economy under the next government, led by conservative Friedrich Merz, expected to take power in early May.
Despite the bleak forecast, Habeck emphasizes the importance of strengthening European unity and independence to counteract the economic pressures from major trade partners, urging for a proactive stance in negotiations with the U.S.