The head of the German Central Bank (Bundesbank), Joachim Nagl, warned that Germany is facing a special danger due to American customs duties, as its great dependence on exports makes it one of the most vulnerable economies to be affected by the commercial barriers imposed by the United States, which may lead to decline in growth for years to come , At a time when the German economy is already suffering from continuous industrial stagnation.
In a speech delivered on Monday, Najil indicated that the economic model of the Bundankanic showed that the German economy, which relies heavily on exports, will be the most affected by any escalation in American commercial barriers.
“Our economy in 2027 will be about 1.5 percentage of what was expected,” he said, noting that this would be a severe blow to the country’s economy.
According to the current expectations of Bundanb, the German economy is expected to grow only by 0.2% in 2025, to rise to 0.8% in 2026. Taking into account the impact of American customs duties, the German economy may face more contraction rather than recovery.
The possibility of declining American growth
Although the United States is seeking to protect its local industry by imposing customs duties on foreign imports, Nahel stressed that the American economy itself will be negatively affected by these measures.
He said that “the loss of purchasing power and the high costs of intermediate industrial inputs will exceed any competitive advantages that the American industry may achieve.”
Inflation and price expectations
The Bundesbank indicated that the effect of customs duties on inflation rates is still unclear. While some models showed that the effect would be slight, other models warned that commercial escalation may lead to a noticeable increase in prices.
Nagl explained that the reprisal customs duties that Europe may impose will be reflected on consumers through high prices, and that the euro weakness may increase the cost of imports, which enhances the pressure of inflation.
In light of these challenges, the German economy remains a difficult test to adapt to global trade transformations, amid fears that trade tensions between the United States and Europe will lead to more economic turmoil.
For his part, the President of the Italian Central Bank, Fabio Panetta, indicated that the entire global economy may be affected if all customs duties promised by US President Donald Trump promised before the elections.
According to the Panetta analysis, this may lead to a decline in global growth by 1.5 percentage points, while the US gross domestic product may decrease by two percentage points.
Panetta also pointed out that Chinese companies, which may be excluded from the American market because of these fees, will search for new markets in Europe, which may increase competition and pressure on European producers, especially in the major industrial sectors such as cars and technology.
