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Trump's tariffs are boosting the German economic boom - but what happens now?
The German economy is growing surprisingly thanks to Trump's tariff policy, but there is a risk of stagnation in the second quarter. Current analyses.
Trump's tariffs are boosting the German economic boom - but what happens now?
The German economy shows surprising growth figures in the first quarter of 2025. How wort.lu reported that gross domestic product grew by 0.4 percent compared to the previous quarter, which is twice as strong as originally forecast.
This increase is primarily attributed to forward transactions in connection with US President Donald Trump's customs policy. However, economists warn against overinterpreting this development as it is seen as a one-off effect. Thomas Gitzel, chief economist at VP Bank, said that Trump's tariffs are boosting the growth of the German economy.
Industry and exports benefit
The sharp increase in industrial production and exports in March was particularly notable. Carsten Brzeski, ING chief economist, even describes the first quarter of 2025 as the best since the third quarter of 2022, also thanks to political measures from the USA. However, he expects stagnation in the near future, mainly due to higher tariffs on US imports.
Exports, which include cars and pharmaceuticals in particular, rose by 3.2 percent in the first quarter. These goods are crucial for German exports to the USA and thus support the economy. Despite these positive developments, uncertainty remains due to a lack of agreement between the US and the EU on tariff levels. A survey by the Ifo Institute shows that exporters are less pessimistic than in April, but concerns about economic stability remain.
Perspectives and challenges
At the G7 meeting, Joachim Nagel, President of the Bundesbank, said that weak economic development was to be expected in 2025. The higher tariffs on imports of products from the USA could put additional pressure on German exporters. The statisticians speak of anticipatory effects in the trade conflict with the USA, which benefited growth in this quarter.
In summary, the German economy received a short-term boost from Trump's tariff policy in the first quarter of 2025. However, the coming months could be characterized by challenges arising from uncertainties in trade relations and rising tariffs. For further information on the effects of Trump's tariff policy on the German economy, please also read manager-magazin.de.