German economy braces for Trump's return to White House
FRANKFURT

Germany hopes its economy, after shrinking for two years, can turn the corner in 2025, but Donald Trump's return to the White House threatens new headaches for Europe's largest economy.
Some fear the protectionist policies that Trump has threatened could reduce German GDP by one percent and cost 300,000 jobs.
For almost a decade, the United States has been the number-one destination for German exports.
Germany sent 158 billion euros ($163 billion) worth of goods to the United States, equivalent to 10 percent of its total exports in 2023.
The huge volume resulted in an export surplus that was itself singularly large. Germany's exports were worth 63 billion euros more than the goods it imported from the United States.
"The importance of the United States for Germany's export economy is currently greater than ever in the last 20 years," said the federal statistics agency Destatis.
Germany's strong trading relationship with the United States has however already drawn the ire of Trump and left it particularly exposed to his threat to impose tariffs on key trading partners.
In 2017 during his first term in office, Trump said Germany's trade surplus with the United States was "very, very bad," a theme he returned to on the campaign trail last year.
"They don't take anything," he fumed at one event. "But they give us their Mercedes, their BMWs, their Volkswagens."
Germany's flagship auto industry depends particularly heavily on consumers in the United States, their second-largest export market after China.
The share is even higher for the chemicals sector, around a quarter of whose exports were shipped across the Atlantic.
The IfW Kiel economic institute said the stakes are high, warning that Trump's return to the White House is the "most economically difficult moment" in post-war Germany's history.
Policy analysts have been working overtime to calculate the potential impact on the German economy if Trump were to make good on his threat to slap a 20 percent tariff on goods from the European Union.
German exports to the United States could fall by some 15 percent, the Munich-based Ifo institute estimated.
Economists at the IW Koeln think tank reckoned with 130-180 billion euros of lost growth over the four years of Trump's second term if import taxes were raised.
All in all, Trump's economic policies could cost Germany one percent of GDP, the head of the German central bank, Joachim Nagel, warned at the end of last year.
Some 1.2 million jobs in Germany were dependent on exports to the United States and 300,000 could be lost if major tariffs were imposed, according to a study carried out by the Prognos think tank.
If higher tariffs make German goods more expensive and therefore less competitive in the United States, then one solution for company managers would be to shift production across the Atlantic.
"Companies will react and produce even more locally," said Achim Wambach, head of the Centre for European Economic Research (ZEW).
"Private investment in Germany is likely to continue to fall, which could accelerate deindustrialisation," said Marcel Fratzscher, president of the DIW economic institute.