The US threat of tariffs could cost Germany 200 billion euros.
The US president announced he would impose a 50% tariff on imports from the EU, citing stalled trade negotiations.
According to a report by the German Institute for Economic Research (IW) published last weekend, the German economy could suffer losses of 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 US is Germany's main trading partner; according to official figures, total trade in goods is expected to be worth €253 billion (equivalent to $287 billion) in 2024.
Germany's export surplus in goods trade with the US – reaching €17.7 billion – 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 nearly 75%.
The IW report states that between 2025 and 2028, Germany's average economic output will be 1.1% lower than in a scenario without increased tariffs. If the EU retaliates with similar countermeasures, the total damage could rise to €250 billion by 2028.
In a Truth Social post on May 23, Trump claimed that the EU was originally founded "with the primary purpose of taking advantage of the United States in trade." He went on to say that the bloc was "very difficult to deal with."
He accused the EU of imposing damaging economic policies, taxes, and regulations, as well as conducting "unfair and unreasonable lawsuits against American companies," which he argued contributed to an "completely unacceptable" trade deficit.
According to the U.S. Trade Representative (USTR), the deficit currently stands at approximately $240 billion per year. Trump further announced that, due to stalled negotiations, he is proposing a 50% tariff on all goods from the EU, effective June 1, 2025.
U.S. Treasury Secretary Scott Bessent reiterated these criticisms later that day on Fox News, saying he believed the president viewed the EU's proposals as failing to meet the standards set by other major trading partners.
"I won't negotiate 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 ensuring a trade agreement 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 is prepared to defend its interests.
In a related development, on May 26, TASS reported that US President Donald Trump had agreed to postpone the application of a 50% tariff on exports from the EU until July 9.
"Today, I received a call from European Commission President Ursula von der Leyen, requesting an extension of the June 1st deadline for the 50% tariffs related to Trade and the European Union. I agreed to the extension until July 9th, 2025," he wrote on the social media platform Truth Social.
The American leader added that "the chairman of the committee said that negotiations would begin quickly."
