The re-election of Donald Trump as US president is likely to lead to ‘very negative’ growth effects in Germany, according to one fifth of economics professors surveyed by the ifo Institute.
A further 69% said that they expect ‘rather negative’ growth effects from Trump’s re-election, while 7% expect no effect and 2% expect positive effects.
Conducted alongside FAZ, the survey asked 180 economists how they assessed Trump’s re-election in terms of growth, trade and exchange rates.
Negative effects
In terms of the broader European picture, 11% of economists said that they expect ‘very negative’ effects for the European economy from Trump‘s re-election, while 76% expect ‘rather negative’ effects. Some 9% expect no influence, while 2% expect positive effects.
The economists were almost united in terms of the ‘Trump effect’ on international cooperation, with 90% expect negative consequences for international trade, given the likelihood of widespread tariffs and withdrawal from multilateral agreements.
Some 70% of economists also expect very negative effects in addressing climate change as a result of Trump returning to the White House.
Germany ‘poorly prepared’
A sizeable majority of those surveyed (85%) also believe that Germany is poorly prepared for Trump’s second term, citing insufficient preparations for trade disruptions and foreign policy challenges. Just 4% believe that Germany is well-prepared, while 11% answered ‘don’t know’.
‘The majority stated that no or insufficient preparations had been made,’ the ifo said. ‘Participants see backlogs in military investments and in the level of de-risking at German companies. There are also no more in-depth measures to protect the German economy against trade and foreign policy shocks.
‘According to participants, the focus has been on free trade for too long and the necessary trade agreements have not been agreed in time. Added to this is the currently weak German economy and political uncertainty following the end of the traffic light coalition. There is also a lack of a unified European response.’
The survey took place from 12 to 19 November. Read more here.
