German Economy Faces Uncertainty Amid US Tariff Policies

According to preliminary data released by the Federal Statistical Office of Germany on April 30, after price, seasonal, and working - day adjustments, Germany's gross domestic product (GDP) increased by 0.2% quarter - on - quarter in the first quarter of this year. The German economy had declined by 0.2% quarter - on - quarter in the fourth quarter of last year.

The data also showed that in the first quarter of this year, both investment and private consumption expenditure increased quarter - on - quarter. However, on a year - on - year basis, after price adjustments, the German economy contracted by 0.4% in the first quarter.

The Munich Institute for Economic Research issued a statement on the same day, saying that the German economy may decline again this summer. The statement pointed out that since April, the United States has significantly raised tariffs on EU imported goods and threatened to further increase them, bringing obvious pressure to the German economic outlook.

Timo Wollmershaeuser, the head of economic forecasting at the Munich Institute for Economic Research, said that the US tariff policy has increased the uncertainty for enterprises in Germany. It has become increasingly difficult for enterprises to judge future business development, and their expectations have become significantly more pessimistic.

In 2023 and 2024, the German economy shrank by 0.3% and 0.2% respectively. Affected by factors such as US trade policies, the German federal government recently lowered its economic growth forecast for Germany in 2025 to zero growth, which means that the German economy may fail to achieve growth for the third consecutive year.