The economy is stagnating – and now Trump’s tariffs are coming

The German economy grew by 0.2 percent, but Trump's tariffs are likely to cause severe damage soon. The labor market, in particular, urgently needs stimulus.

It's like the calm before the storm. The German economy performed unspectacularly in the first three months of 2025. Gross domestic product even increased slightly by 0.2 percent, the Federal Statistical Office now reports. But US President Donald Trump 's tariff inferno is likely to drastically change the picture in the coming months. "This will place an enormous burden on the German economy," says Sebastian Dullien, Scientific Director of the Institute for Macroeconomics and Business Cycle Research (IMK).