Berlin (Agencies): The ongoing trade war initiated by former US President Donald Trump is projected to cost Germany a staggering 290 billion euros ($330 billion) by 2028, according to a study by the German Economic Institute (IW). This loss represents an annual reduction of 1.6% in Germany’s GDP, highlighting the significant economic impact of the tariffs.
The study also estimates that the European Union as a whole could face losses amounting to 1.1 trillion euros between 2025 and 2028. Developing nations and transition economies are expected to suffer even more severely, with the IW predicting a “dramatic decline in growth rates” for these regions.
The trade war escalated in April 2025 when Trump signed an executive order imposing reciprocal tariffs on imports from various countries. A base tariff rate of 10% was established, with higher rates applied to 57 nations based on the US trade deficit with each. By April 9, a 10% baseline tariff was extended for 90 days to over 75 countries that had not retaliated or sought negotiations, excluding China. The conflict intensified as US tariffs on Chinese goods soared to 145%, while China’s tariffs on American imports reached 125%.
The IW report underscores the far-reaching consequences of these tariffs, not only for Germany and the EU but also for global trade dynamics. The economic strain is expected to ripple across industries, affecting employment, investment, and growth prospects worldwide.
This development raises concerns about the long-term implications of protectionist policies and their potential to disrupt international economic stability.