Germany Witnesses Third Year of Economic Stagnation

(MENAFN) Germany is confronting its third consecutive year of economic stagnation, largely due to the recent increase in U.S. tariffs and mounting unpredictability surrounding Washington’s trade direction.

This development was highlighted in a report by the media on Tuesday, which referenced a confidential forecast from the German government.

Earlier in the month, United States Leader Donald Trump implemented a 20 percent tariff on all European Union exports and a 25 percent duty specifically targeting steel, aluminum, and automotive imports.

The action was taken to correct what Washington refers to as an unfair trade imbalance.

While the European Commission responded with plans for 25 percent counter-tariffs, Trump temporarily suspended the majority of additional duties for 90 days to provide time for diplomatic discussions.

Nonetheless, the 10 percent general tariff and the selective 25 percent charges remain active.

Based on the internal report, Chancellor Olaf Scholz’s outgoing administration has adjusted its gross domestic product (GDP) projection for 2025 from 0.3 percent to a flat 0 percent.

This revision would represent a historical first: the largest economy in the European Union failing to achieve any growth over a span of three consecutive years, following declines in both 2023 and 2024.

A slight recovery is anticipated in 2026, with estimated growth reduced from 1.1 percent to 0.9 percent.

Figures from the Federal Statistical Office indicate that the United States was Germany’s principal trading partner the previous year, amplifying the economic consequences of the newly imposed tariffs.

MENAFN23042025000045017167ID1109461963