Trump’s Tariffs Could Blow a $1.25 Trillion Hole in EU Economy, German Study Warns
The European Union could be staring down the barrel of a massive economic hit—up to $1.25 trillion—if President Trump follows through on proposed tariffs, according to a new report by Germany’s top economic think tank.
The study, released by the German Economic Institute (IW), sounds the alarm over what could happen if the EU refuses to level the playing field. Trump’s America First trade strategy, which includes a 20% blanket tariff on EU goods and a 25% tariff specifically aimed at car imports, is designed to claw back advantages handed to Brussels in past one-sided deals.
If the tariffs go into effect and no agreement is reached, the EU economy could bleed between €780 billion and €1.1 trillion from 2025 to 2028. The blow would have catastrophic consequences for the Old Continent.
Germany—Europe’s economic heavyweight and one of the biggest beneficiaries of the current trade imbalance—would take the biggest blow, with GDP potentially dropping by up to 1.6% annually.
That’s not just theoretical. The report projects Germany could lose a staggering €180 billion (around $205 billion) in output by 2028. Export-heavy industries like auto manufacturing and pharmaceuticals would suffer the most—industries that have profited for decades off access to the American market.
In 2024 alone, trade between Germany and the United States hit €253 billion ($287.5 billion), making the US Berlin’s top trading partner. But the good times may be over, as President Trump looks to secure better terms for American workers and industries.
While Trump has paused the tariffs for 90 days to allow time for negotiations, talks with EU officials have gone nowhere fast. European Commission President Ursula von der Leyen offered a “zero-for-zero” industrial tariff deal, but Trump wasn’t buying it, rightly demanding the EU commit to $350 billion in US energy purchases before backing off.
So far, Brussels isn’t budging. But with the clock ticking, the EU might soon have to decide: protect its outdated globalist trade model, or face an economic storm of its own making.
Meanwhile, there may be a glimmer of hope for cooler heads to prevail. Italian Prime Minister Giorgia Meloni, widely seen as a rising star among Europe’s nationalist leaders, met with President Trump in Washington today, launching what some are calling a diplomatic charm offensive.
Giorgia Meloni welcomed with honor by Trump.pic.twitter.com/y1BFOfCwn9
— RadioGenoa (@RadioGenoa) April 17, 2025
Over lunch at the White House, Meloni—arguably the only European leader besides Hungary’s Viktor Orbán with a friendly personal rapport with Trump—voiced optimism about striking a deal, telling reporters, “I’m here to help with that.” Trump echoed her confidence, saying he believed a deal was “100 percent” possible, as long as it’s fair.
Meloni criticized the initial tariffs but stressed unity and reaffirmed America’s role as a “reliable partner.” As the first European leader to meet with Trump amid the trade dispute, her visit could signal a shift in tone—and possibly a path forward—if Brussels is willing to come to the table.
The post Trump’s Tariffs Could Blow a $1.25 Trillion Hole in EU Economy, German Study Warns appeared first on The Gateway Pundit.