Germany has officially reduced its economic growth forecast for 2025 from 0.3% to zero, indicating a year of stagnation after two years of recession. Outgoing Economy Minister Robert Habeck said at a press conference in Berlin on Thursday, “Made in Germany is over.”
He blamed the situation mainly on trade policies under former U.S. President Donald Trump. “This is for mainly one reason, and it is Donald Trump’s trade policy,” said Habeck, appearing to deflect criticism away from past domestic economic decisions.
The United States remains Germany’s largest trading partner, but the return of tariffs under Trump—including a 10% duty on EU goods—has significantly strained trade relations.
“Tariffs and trade policy turbulence are hitting the German economy harder than other nations,” Habeck said. “We depend on open markets, functioning markets, and a globalized world. That’s what has made this country rich.”
Germany is also facing increasing competition in China, where its automakers are rapidly losing market share to local electric vehicle companies. “An aggressive push of China into German markets could still wreck our economy,” Habeck warned.
He also criticized the lack of political action following the collapse of Chancellor Olaf Scholz’s coalition government last November. “For half a year now, hardly any initiative has been taken to counteract the stagnation through legislation or measures,” he said.
Helena Melnikov, head of the German Chamber of Industry and Commerce, echoed Habeck’s concerns. “The situation of the German economy is serious,” she said, urging the new government to urgently work on resolving the tariff conflict with the U.S. at the EU level. She warned that time is running out.
