Germany says risks to the country due to US political shift

The head of the Bundesbank Joachim Nagel said that the protectionist policy of US President Donald Trump will cause significant damage to the German economy. His words are quoted by The Wall Street Journal (WSJ) newspaper.

"The abrupt change in U.S. policy poses significant risks to economic growth in Germany," Nagel said, speaking in Frankfurt.

He said the combined effect of higher tariffs, tax breaks, the impact of mass deportation of immigrants, and retaliatory duties and macroeconomic uncertainty would result in output in 2027 being nearly 1.5 percent lower than forecast.

In its December forecasts, which did not take into account the increased U.S. tariffs, the Bundesbank predicted the German economy would grow 0.9% in 2027 and just 0.2% this year.

While the new calculations showed inflation could rise, its exact extent remains uncertain. Nagel said there was a good chance it would return to the European Central Bank's 2% target in the near term.

Trump imposes duties against Canada, Mexico and China. What the media say

Earlier in the day, German Vice Chancellor and Economy Minister Robert Habeck said the Trump administration has launched an attack on the values of Western society, namely the rule of law, liberal democracy and rules-based order.

On the eve of the British newspaper Financial Times reported that the European Union (EU) may block imports of some American products made with technologies, the use of which is prohibited in the association, in response to the trade policy of the American president. For example, the import ban could affect soybeans grown using pesticides.

Trump himself on February 13 called Europe a very difficult trading partner for the United States, because the EU, in particular, imposes high taxes on American companies to benefit. At the same time, the leader of the United States announced the introduction of reciprocal duties.

Before that, on February 10, it was reported that Trump raised tariffs on imports of steel and aluminum to the United States from 10 to 25%, and also removed various exemptions and quotas for duty waivers for the largest suppliers. Also, the President of the United States specified that these duties will be imposed on the products of those countries that had previously imposed retaliatory restrictions on American products.