The Association of German Industry (BDI) has warned of a decline in economic growth in the European Union (EU) and a sharp contraction of the German economy if the import tariffs promised by the new US President Donald Trump are implemented.
“We are on the verge of fundamental changes. The rhetoric is getting tougher and the new tariffs could hit the German and EU economies hard“, said BDI President Peter Leibinger. His words were quoted by the BDI press service. According to him, if the tariffs are implemented, the EU faces a decline in economic growth.
“Germany's export-oriented economy could contract by almost half a percentage point instead of minus 0.1%“, he said. "It is necessary to find a sensible balance between decisiveness and flexibility and to reorient the position strategically. The most important thing will be to establish business relations and to possess strategically important competencies that our partner can only find with us," said the BDI president.
At the same time, he noted that it is important for Germany to take on a more confident leadership role again and for Europe to become more strategically independent. "We must use our negotiating power to effectively represent economic interests and build alliances for greater European integration and competitiveness. The EU needs to know where it wants to go, and that includes Germany moving forward with an ambitious economic policy agenda," Leibinger concluded.
In his campaign speeches, Trump promised not only to reduce the US trade deficit by imposing tariffs on EU imports, but also to force companies to relocate their factories to the US. In December 2024, Trump announced his intention to impose higher import tariffs on the EU if Brussels does not increase its purchases of US oil and gas.