The German government is forecasting the country’s economy, Europe’s biggest, will stagnate this year as U.S. President Donald Trump’s tariffs and trade threats weigh on its performance
BERLIN — The German government forecast Thursday that the country’s economy, Europe’s biggest, will stagnate this year as U.S. President Donald Trump’s tariffs and trade threats weigh on its performance following months of political uncertainty.
Outgoing Economy Minister Robert Habeck said the government cut its 2025 outlook to zero from the modest growth of 0.3% it predicted at the end of January. For next year, it is forecasting growth of 1%, slightly lower than the 1.1% it predicted three months ago.
“There is above all one reason for this, namely Donald Trump’s trade policy and the effects of the trade policy on Germany,” Habeck told reporters in Berlin. He noted that Germany also hasn’t had a government with a parliamentary majority to set policy since early November, and the new government isn’t yet in place after an election in February.
Germany hasn’t seen significant economic growth in five years. The country for years expanded exports and dominated world trade in engineered products like industrial machinery and luxury cars.
But it’s suffered