A Donald Trump victory in the US presidential elections in November will hit German exports, the Munich-based ifo economic institute predicted on Monday.
German exports to the United States could fall by almost 15% if Trump implemented higher import tariffs, economists from ifo and Econpol Europe predicted in a joint scenario.
The automotive and pharmaceutical sectors would be worst hit, suffering declines of around a third. Knock-on effects would also impact exports to China, which could fall by almost 10%, the analysts predicted.
During his campaign, Trump has announced tariffs of 60% on US imports from China and 20% on imports from the rest of the world. The 20% tariff would make German products considerably more expensive in the US.
And the much higher tariffs on Chinese goods would have the knock-on effect that demand from China’s industrial sector would fall, the ifo and Econpol economists said.
“If Trump is elected again, and a new trade war starts with China, Germany as an exporting nation would suffer greatly as a result,” ifo trade expert Lisandra Flach said.
Flach and her co-authors based their calculations on the direct effects of increases in US tariffs, not taking into account expected countermeasures taken by China and other countries. If these were included, the impact on Germany would be even greater, they said.
#dpa
