The re-election of Donald Trump as U.S. President has raised significant concerns for the German economy, according to Michael Hüther, Director of the Institute of German Economy (IW). Trump’s decisive victory, described by Hüther as a "worst-case scenario," comes at a time when Germany is already grappling with numerous economic setbacks.
Hüther warns that German businesses should brace for a costly trade conflict, estimating potential losses of up to 180 billion euros over the next four years. “Companies must prepare for an expensive trade war,” he said, emphasizing the uncertainty surrounding Trump’s policies and the expectation of further economic challenges. Positive surprises, he noted, are not anticipated.
He also urged the German government to be better prepared for Trump’s presidency than it was in 2016. The current governing coalition must act swiftly to reinforce the country's economic and geopolitical standing. Hüther highlighted the urgent need for Germany to bolster its economic resilience and called on the European Union to advance stalled trade agreements, such as those with the Mercosur countries, putting aside political differences for the sake of economic stability.
"The time has come for Germany and the EU to take decisive action," Hüther concluded, stressing the importance of improving business conditions and strengthening geopolitical independence in the face of upcoming challenges.
Source: IW Köln, Photo: Fotolia
