Germany is bracing for another year of economic pain after slashing its 2025 growth projection from a meager 0.3% to flat-out zero—signaling a full-blown economic standstill. After two back-to-back years of recession, the news marks a sobering turning point for Europe’s largest economy.
At a press conference in Berlin, outgoing Economy Minister Robert Habeck didn’t sugarcoat it: “Made in Germany is over.” He pointed the finger squarely at U.S. trade policy, notably the return of tariffs under former President Donald Trump. “This is mainly due to Donald Trump’s trade policy,” Habeck said, sidestepping critiques of Germany’s own economic leadership in recent years.
The United States still holds the title of Germany’s top trading partner, but the reintroduction of tariffs—like the 10% levy on EU goods—has thrown a wrench into what used to be a smooth-running economic engine. “Tariffs and trade policy turbulence are hitting us harder than others,” Habeck explained. “We’ve thrived on open, global markets. That’s where our wealth came from.”
Meanwhile, trouble is brewing in the East. German automakers, once dominant in China, are now losing ground to nimble local EV competitors. “China’s aggressive market push could finish what the trade war started,” Habeck cautioned.
To make matters worse, the political deadlock following the collapse of Chancellor Olaf Scholz’s coalition government late last year has left the country rudderless. Habeck didn’t mince words: “We’ve had six months of legislative silence while the economy slides.”
Helena Melnikov, who leads the German Chamber of Industry and Commerce, backed Habeck’s grim outlook. “Germany’s economic situation is critical,” she said, calling on EU leaders to act fast to defuse the tariff standoff with the U.S. “Time is not on our side.”
With trade headwinds, political gridlock, and global competition closing in, Germany’s path to recovery is looking more uncertain by the day.
