Trump’s 50% tariff threat puts €200 billion of German trade at risk Cologne Institute reveals

The German economy could suffer losses of up to €200 billion by the end of 2028 if the United States moves ahead with a proposal to impose 50% import tariffs on goods from the European Union, according to a new study released by the Cologne Institute for Economic Research (IW).

The German think tank’s projection is based on the assumption that the proposed tariffs would remain in force for the entire duration of the current US administration.

According to IW analysts, if such tariffs are enacted and maintained, Germany’s gross domestic product (GDP) would drop by approximately 0.1% in 2025. The losses would increase in the following years, with GDP expected to be, on average, 1.1% lower by 2028 than it would have been without the US trade measures.

IW further warned that if the European Union retaliates by introducing its own reciprocal tariffs, the total cost to Germany’s economy could escalate to €250 billion over the same period.

The report also noted that such tariffs would not only damage the German economy but also hurt the United States. Certain products, such as automotive cranes, are sourced almost exclusively from Germany. In 2024, about 95% of the automotive cranes imported into the US—valued at approximately $850 million—originated from Germany, the institute calculated.

The warning from IW came a day after US President Donald Trump publicly called for the introduction of 50% tariffs on goods imported from the European Union. Writing on his social media platform Truth Social, Trump accused the EU of being created “with the primary purpose of taking advantage of trade with the United States,” and described it as an “extremely difficult partner.”

He cited what he characterised as the EU’s “massive trade barriers,” value-added taxes, “ridiculous corporate fines,” non-monetary trade restrictions, currency manipulation, and “unjustified lawsuits against American companies.” These practices, Trump claimed, have led to a US trade deficit with the EU of “over $250 million a year”—though this appears to be a misstatement, as official European figures show the EU had a goods trade surplus with the US of around $227 billion in 2024.

Trump said that negotiations between Washington and Brussels had produced no results and recommended that the new tariffs take effect on June 1, 2025. He clarified that the 50% tariffs would not apply to goods manufactured within the United States.

In a subsequent statement, Trump said he was not considering any trade deal with the EU and did not know what the bloc could do to persuade him to reverse the tariff decision.

By Tamilla Hasanova