Germany looks to be headed for economic meltdown (as this publication has predicted since early in the year,) due to the trade war between the US and China, with economists urging Chancellor Angela Merkel to give the go ahead to a money printing programme to save the nation.
Sebastian Dullien of the Institute for Macroeconomics and Business Cycle Research claimed the German Chancellor is burying her head in the sand regarding the impact of the China / US trade war on Germany’s economy or how Trump’s tariffs will impact German exports, which he claims has already had a detrimental effect on Berlin.
Talking about the economic situation in Berlin, the main financial contributor to the EU, he said: “The German economy is currently hanging by a thread”.
Referring to the tit-for-tat tariff squabble between Xi Jinping and Donald Trump, he added: “We have a development that we have never had in the earlier upswings, namely that actually the industrial cycle has already fallen – this comes mainly from the weak export demand – but at the same time the domestic economy is still running.”
He added: “The global trade disputes already hit Germany today. Although we do not yet have any significant punitive tariffs on German products, the trade war between the US and China is also affecting the German industry.
“And the reason here is that a lot of the industrial companies in China and the Asian suppliers are using German machinery and equipment.
“And for them the trade war is a massive burden and secondly, they are not sure if they can continue to produce, they have put their orders on hold or cancelled them.
“And that is one of the reasons why, for example, German machinery and plant engineering is not doing well in Germany at all.”
He declined to answer a question on whether President Trump would achieve the balanced trade end result he was seeking with China or whether the current imbalance would continue.