US tariffs on EU goods would hit German economy hard, institute finds

US tariffs on European goods could have a massive impact on the German economy, a leading economic institute said on Wednesday.

The calculations by the Munich-based ifo Institute come just hours before US President Donald Trump is expected to announce a massive round of duties.

If the United States were to announce reciprocal tariffs – increasing duties to the same amount levied on US exports by trading partners – German exports would fall by 2.4%, a report by the institute showed.

Around half of German exports to the US would be affected, ifo trade expert Lisandra Flach said.

The impact would be limited as the existing gap in tariffs between the US and the European Union is only around 0.5%, the study argued.

However, a blanket tariff increase of 20% would be exponentially worse for the German economy.

Earlier simulations by ifo found that US tariffs of 60% on China, and 20% on the rest of the world, would see German exports to the US plunge by around 15%.

In contrast, a deal between the EU and US to reduce reciprocal tariffs would benefit the German economy, the study found.

“The planned tariffs increase marks a turning point and is a frontal attack on the rules-based global economic order,” said Flach. “In practice, it undermines almost 80 years of multilateralism.”