Trump’s Electoral Success Causes Panic in German Establishment

If Trump manages to return to the White House, Germany's GDP risks shrinking by 1.2%

To paraphrase Karl Marx, who in 1848 began his Manifesto with the words, “A specter is haunting Europe – the specter of Communism,” we can say that in 2024, “a specter is haunting Europe – the specter of President Donald Trump’s re-election.” After Trump’s series of victories in the Republican Party primaries, the return of the former US president to the White House no longer seems an impossible prospect for European politicians. They begin to analyze the hypothetical implications for the Old World of Biden losing the November 5 election.

Germany was the first to speak out. According to a study by the German Economic Institute in Cologne (IW), “Donald Trump’s re-election as US president will cost Germany a GDP contraction of at least 1.2% between 2024 and 2028.” This could be due to Trump’s ability to “raise customs duties on European exports to the US” upon his return to the White House.

IW economists Thomas Obst, Jürgen Matthens, and Samina Sultan estimate that Germany could lose between 120 and 150 billion euros over the four years of the Trump-led US administration just because of potential trade disputes with the United States. The analysis is based on a calculation model, according to which the US decides to impose 10-percent duties on imports from Europe in 2025, while for China they will reach as high as 60%. German experts estimate that the new “duty war” will also hit the US economy, where there will be a decline from 1% to 1.4%, which in monetary terms will mean a loss of 600 billion to 1 trillion dollars over four years.

Nevertheless, IW estimates that the trade war “will not primarily hit the US, but the global economy and, above all, the EU countries.” German exports will collapse by 4.5%. To deal with these hypothetical threats, the Institute called on Brussels to “prepare in advance to respond by threatening Trump’s US” with unspecified “credible responses.”