Germany's Economy Grows 0.2% in Q1 Amid US Tariff Threats

Germany's economy grew by 0.2% in the first quarter of 2025, rebounding from a contraction in the previous quarter and slightly outperforming some analyst expectations. The growth was driven by increased household consumption and investment, offering a rare bright spot for the country after several quarters of sluggish performance. However, the outlook remains uncertain as US President Donald Trump's new tariffs pose a significant threat to Germany's export-oriented economy, with the US being its top trading partner. While some tariffs have been temporarily reduced to allow for negotiations, the German government has revised its forecast to predict stagnation for the remainder of the year, citing trade tensions as a key factor. Key sectors such as autos and construction continue to face challenges from international competition, higher costs, and regulatory issues. Despite the recent growth, Germany's economic recovery is fragile and highly vulnerable to further shifts in global trade policy.