The head of Germany’s prestigious IFO Institute has warned that a potential European response to new US import tariffs could pose serious risks to the German economy.
US President Donald Trump announced on Friday that import tariffs on cars and trucks from the EU would be raised to 25%.
Trump alleges that the European Union is not complying with trade agreements with the United States.
The tariffs are expected to hit Germany’s already struggling automotive industry hard.
Clemens Fuest, the IFO Institute director, fears that a counter-reaction by the EU could trigger a trade war, possibly driving Germany into a recession this year.
