BERLIN — Germany’s acting finance minister Jörg Kukies warned that U.S. President Donald Trump’s “Liberation Day” tariffs could inflict serious damage on Germany’s export-driven economy and significantly increase the risk of recession.
“If things stay as they are, our exports to the U.S. will decline by about 15 percent,” Kukies said in an interview with German broadcaster ZDF late Monday, referring to data from the Munich-based research institute Ifo. “Our growth prospects would deteriorate, and the risk of recession would increase.”
Trump last week dumped the European Union in the worst category of America’s trade partners Wednesday, hitting the bloc with a 20 percent tariff on all imports. If the tariffs remain in place, they will hit the German economy particularly hard; the U.S. is Germany’s largest export destination outside the European Union.
Kukies dismissed the idea that Washington has gained the upper hand in trade talks after announcing the latest tariffs.
“The willingness to negotiate existed long before the tariffs were announced,” he said. “I don’t see that the U.S. has gained any great advantage.”
Kukies also backed the European Commission’s strategy of preparing tough countermeasures if talks fail, while offering to eliminate tariffs on industrial goods if the U.S. reciprocates. “There’s a broad consensus in German politics behind this strategy,” Kukies said.
He also pointed to deteriorating sentiment in the U.S. economy. “All the reactions we’re seeing from U.S. businesses and surveys indicate that the risk of recession is rising,” he said. “And in a downturn, tax revenues tend to shrink — not grow.”
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