In early March, President Donald Trump announced the implementation of steel and aluminum tariffs, claiming a desire to reduce competition on American metalworking businesses. This change produced considerable reverberations worldwide, with global economists pondering the possibility of an oncoming trade war.
The economic experts based in Mannheim, Germany, who oversee the ZEW index of economic sentiment were no exception, with their measurement of confidence falling more than 10 points from its February 2018 rating to reach 5.1 percent, according to The Associated Press.
Germany is the strongest economy within the European Union in light of the U.K.'s impending exit from that group of nations, but machinery and automotive exports constitute almost half of the country's economic output, so import taxes on raw metals would be a definite impediment.
Much worse would be the result of any extended dispute between the two nations catalyzed by the tariffs, as Capital Economics economist Stephen Brown explained in a note to investors obtained by Deutsche Welle.
"The tariffs will have only a small direct impact, but Germany would be straight in the firing line if a tit-for-tat trade war prompted the U.S. to impose tariffs on automotive imports," Brown wrote, according to the news provider.
However, Peter Altmaier, economy minister of Germany, met with U.S. representatives March 19 and reported that the conversation pointed toward the possibility of compromise that would avert trade-based hostilities.