# US tariffs could extend Germany's recession, says Bundesbank chief

3 days ago

Faarea Masud  
Business reporter, BBC News



Tariffs on goods being imported into the US could tip Europe's largest economy into another recession, according to the president of Germany's central bank.

Germany's economy has contracted for the past two years and with tariffs, the country "could expect a recession for this year" too, Joachim Nagel, the head of the Deutsche Bundesbank, told the .

Without tariffs, the bank forecasts the German economy will stagnate but still grow, by about 0.2%, he added.

He said "there are only losers" when imposing tariffs, and supported the EU's retaliatory measures against US President Donald Trump's 25% tariff on all steel imports from overseas.

Tariffs are a central part of Trump's overall economic vision - he hopes they will boost US manufacturing and protect jobs, but critics say in the immediate term they will raise prices for US consumers.

In response to Trump's move, the EU has 

Mr Nagel called Trump's tariff policy "economics from the past" and "definitely not a good idea".

A global trade war is one of the concerns from tariffs and retaliatory tariffs, he said, but added it was a "necessity" for the EU to react "because if something is working against you, you can't accept a policy like this".

However, he suggested that when the US realises that the price that needs to be paid will be "highest on the side of the Americans", it will allow further opportunity for all sides to come to a different resolution.

"I hope that in the end, good policy will succeed," he said.

## 'Tectonic changes'

Commenting on , which were altered allow the country to borrow more to spend on defence and infrastructure, Mr Nagel said it was an "extraordinary measure" for an "extraordinary time".

"The whole world is facing tectonic changes which makes the current situation very different from those seen in the past, hence the fiscal change," he said.

He added the policy change would allow Germany some financial breathing room for recovery in the next few years, adding it provided a "stability signal to the market".

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