German Investor Confidence Plummets as Tariffs Threaten Recovery

Confidence in the German economy plummets in April, in the wake of the Trump administration's tariff shock, shows a monthly index from the Zew Institute. The trade war risks shattering the fragile German recovery after two years in a row of shrinking GDP.

» Published: April 15 2025

German Investor Confidence Plummets as Tariffs Threaten Recovery
Photo: Michael Probst AP/TT

The Zew-index, which measures future confidence among German investors, plummeted to minus 14 in April, compared to plus 51.6 in March.

The decline is deeper than feared. The average forecast for April was minus 10, according to Bloomberg.

"It's not just the consequences of the retaliatory tariffs on global trade, but also the dynamics of how the tariffs have changed, which has led to a massive increase in global uncertainty," writes Zew chief Achim Wambach in a comment.

Germany is a direct target of the 25 percent tariffs on cars imposed by US President Donald Trump. But Europe's largest economy – with a large share of exporting industry – is also affected by tariffs on steel and aluminum at 25 percent and so-called retaliatory tariffs (which Trump claims are "reciprocal") at 10 percent.

Leading German institutes have already warned that Germany's growth in 2025 is likely to stall at 0.1 percent – but it could also very well be a third year in a row with decreased German GDP.

Major car manufacturers such as Audi and Mercedes-Benz have or are considering stopping deliveries of certain models to the USA, as the tariffs imposed no longer make sales there profitable.

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By TTTranslated and adapted by Sweden Herald
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