Trump's 'erratic' trade policy hammers German investor sentiment
By Benjamin Chiou
Date: Tuesday 15 Apr 2025
(Sharecast News) - Investor sentiment in Germany has fallen at its sharpest rate since the start of the Russia-Ukraine war, according to the results of a closely watched ZEW survey on Tuesday, due to the "erratic" changes in Donald Trump's tariff plan.
The ZEW's forward-looking indicator of economic sentiment dropped by 65.6 points, from 51.6 in March to -14 in April, well below the consensus forecast of 9.5.
This was the first reading below zero since October 2023 and the lowest print since July 2023.
While the current situation index improved by 6.4 points to -81.2, sentiment surrounding the economic development of the eurozone plummeted, sinking 58.3 to -18.5.
The Trump administration's launch of sweeping trade tariffs at the start of the month - which were followed by a series of back-and-forth changes and ultimately a 90-day pause - has hammered confidence and increased uncertainty for export-intensive sectors across Europe.
According to ZEW, the automobile, chemical, metal, steel and mechanical engineering industries have all seen an erosion in sentiment, following a period of improved prospects.
"The erratic changes in the US trade policy are weighing heavily on expectations in Germany, which have sharply declined," said ZEW president Achim Wambach.
"It is not only the consequences the announced reciprocal tariffs may have on global trade, but also the dynamics of their changes, that have massively increased global uncertainty."
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