German Economists Slash 2025 Growth Forecast to 0.1% Amid U.S. Tariff Impact

Germany’s leading economic institutes have drastically lowered the country’s 2025 growth outlook from 0.8% to just 0.1%.
The revision comes in response to new U.S. tariffs on aluminum, steel, and automobiles, which threaten to destabilize Europe’s largest economy.

Although the updated forecast includes a 25% tariff on German industrial goods, it does not account for the forthcoming 20% reciprocal EU tariffs. These were announced after the initial U.S. measures and could further worsen Germany’s trade position.

Steel and Metal Sectors Face Tariff Headwinds

Germany has remained the only G7 economy with no economic growth over the past two years.
The new trade measures from U.S. President Donald Trump have triggered alarm across critical export sectors.
Notably, WVStahl, the German Steel Federation, warned that both direct and indirect steel exports are at risk.

Germany exports around 2.4 million tons of steel-related products annually to the U.S., including machine tools and precision components.
These goods now face higher duties, along with automotive parts which rely heavily on high-grade rolled steel and specialty alloys.

WVStahl emphasized that the combined impact of direct tariffs on base metals and indirect pressure on the automotive sector could act as a “crisis accelerator.”

Fiscal Stimulus May Cushion the Blow

In February 2025, Germany held national elections. As a result, Conservatives and Social Democrats agreed to form a coalition and announced a €500 billion stimulus fund.
This special budget aims to improve infrastructure, boost defense spending, and modernize energy networks.

These measures are expected to support moderate recovery by 2026 and 2027.
Still, analysts remain cautious. Germany’s projected growth for 2026 is just over 1%, a downgrade from the earlier 1.3% estimate.

Meanwhile, the effect of U.S. protectionist measures has already rattled EU trade policymakers, who are preparing counter-tariffs targeting strategic American exports.

At SuperMetalPrice, we continue to track how these evolving trade dynamics will affect European steel prices, scrap metal supply, and metal exports.