US tariff threat could cost Germany 200 billion euros
The US President announced that he will impose a 50% tariff on imports from the EU, citing stalled trade negotiations.
According to a report by the German Economic Institute (IW) published last weekend, the German economy could lose up to 200 billion euros by the end of 2028 if the 50% tariff is maintained until the end of US President Donald Trump's term.
The United States is Germany's main trading partner, with official figures showing a total trade turnover of 253 billion euros ($287 billion) in 2024.
Germany's export surplus in goods trade with the US – at 17.7 billion euros – was the highest among all its trading partners in the first quarter of 2025.
The German Federal Statistical Office also reported that exports to the US exceeded imports by almost 75%.
The IW report said that between 2025 and 2028, Germany's economic output would be 1.1% lower on average than it would have been without the additional tariffs. If the EU retaliated with similar countermeasures, the total loss could rise to 250 billion euros by 2028.
In a post on Truth Social on May 23, Mr. Trump claimed that the EU was originally formed “for the sole purpose of taking advantage of the United States on trade.” He went on to say that the bloc is “very difficult to deal with.”
He accused the EU of imposing harmful economic policies, taxes and regulations, as well as launching "unfair and unjustified lawsuits against US companies", which he said contributed to a "completely unacceptable" trade deficit.
According to the Office of the United States Trade Representative (USTR), the deficit is currently around $240 billion a year. Mr. Trump went on to announce that, due to stalled negotiations, he proposed a 50% tariff on all goods from the EU, effective June 1, 2025.
US Treasury Secretary Scott Bessent echoed those criticisms later in the day on Fox News, saying he believed the president viewed the EU's proposals as falling short of the standards set by other major trading partners.
"I won't be negotiating on television, but I hope this will be a wake-up call for the EU," he said.
EU Trade Commissioner Maros Sefcovic wrote on X on May 23 that the EU is committed to securing a trade deal with the US based on mutual respect, not threats.
He added that “EU-US trade is unparalleled and must be guided by mutual respect”, but the bloc was ready to defend its interests.
In a related development, on May 26, TASS reported that US President Donald Trump agreed to postpone the application of a 50% tariff on exports from the EU until July 9.
"Today I received a call from Ursula von der Leyen, President of the European Commission, asking for an extension of the June 1 deadline for the imposition of the 50% tariffs on Trade and the European Union. I agreed to extend it until July 9, 2025," he wrote on the social network Truth Social.
The US leader added that "the Chairman of the Commission said that negotiations will begin quickly."
