Thu, 13 Mar 2025

Thu, 13 Mar 2025 US tariffs could deepen Germany's recession, says bank

Germany's central bank president says US tariffs and retaliation to them could tip Europe's largest economy into recession again.
Germany's central bank president, Joachim Nagel, warns that tariffs on goods imported into the US could push Europe's largest economy into recession. He predicts that without tariffs, Germany's economy will stagnate but still grow by 0.2%. However, with tariffs, he believes a recession is likely for this year. Nagel criticizes President Trump's tariff policy as "economics from the past" and says there are only losers when imposing tariffs. He supports the EU's retaliatory measures against US steel imports, which will come into force on April 1. The head of Germany's BGA federation warns that German consumers may face higher prices for American products such as orange juice, bourbon, and peanut butter. Nagel also comments on recent changes to Germany's economic policy, allowing the country to borrow more to spend on defense and infrastructure. He describes it as an "extraordinary measure" for an "extraordinary time". Experts warn that tariffs will make China-made smartphones, TVs, and laptops more expensive in the US and elsewhere, while nearly half of all medicines consumed in the US come from India and tariffs will raise their prices. The EU and Canada have retaliated to Trump's steel and aluminum tariffs with import taxes on US products, leading to concerns about a global trade war. Nagel hopes that when the US realizes the price of its tariff policy, it will lead to a resolution that benefits all sides.
  >>