Germany could endure two more years of recession if a trade war with the United States escalates, according to the Bundesbank. The bank projects a 0.5% decline in German output due to possible US tariffs, severely affecting exports and investment. The current economic climate, marked by energy price surges and the repercussions of the Ukraine invasion, has already caused contraction. The US has threatened substantial tariffs on EU goods, further jeopardizing Germany's role as a key exporter and risking significant job losses if trade tensions persist.
Germany's economy faces recession for two more years due to potential US tariffs, which could lead to a decline in output and significant job losses.
The Bundesbank forecasts a decline of 0.5% in German output this year if US tariffs are fully implemented, contributing to a challenging economic outlook.
The uncertainty caused by trade tensions is expected to weigh heavily on investment in Germany, with a recovery expected only in 2027.
The US's trade policy, if escalated, poses a risk to Germany's job market, potentially leading to the loss of 90,000 jobs linked to exports.
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