Trump tariffs and a no-deal Brexit could push Germany into recession

Credit: Reuters Studio
Published on March 1, 2019 - Duration: 01:37s

Trump tariffs and a no-deal Brexit could push Germany into recession

Germany narrowly avoided a recession last year, but looming US-import tariffs and a no-deal Brexit could destabilize Europe's biggest economy.

Matt Larotonda reports

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Trump tariffs and a no-deal Brexit could push Germany into recession

Germany may have narrowly escaped a recession last year, but looming U.S.-import tariffs and a no-deal Brexit are threatening to destabilize Europe's biggest economy.

Reuters' Michael Nienaber is in Berlin.

(SOUNDBITE) (English) REUTERS CORRESPONDENT MICHAEL NIENABER, SAYING: "The economy is now heading towards a perfect storm some economists say, as U.S. President Donald Trump is mulling steep import tariffs on cars and Britain is sliding towards a possible no-deal Brexit, which would mean further trade barriers for German exporters.

Both risks together, analysts say, could cost the German economy up to 0.7% percentage points of growth, which would probably throw the economy into a recession." As of February, German annual inflation remained below the European Central Bank's target for a third consecutive month.

And concern is growing that the slowdown could go on for a while, potentially dragging down the entire euro zone.

(SOUNDBITE) (English) REUTERS CORRESPONDENT MICHAEL NIENABER, SAYING: "If the German economy should stagnate or even fall into recession, this would definitely put a question mark behind the European Central Bank's planned exit from its loose monetary policy and it would probably push the date far back when the ECB is expected to raise interest rates." German Chancellor Angela Merkel and her ministers are reportedly working behind the scenes to mitigate the impact, should the double whammy of Trump tariffs and a no-deal Brexit happen.

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