Germany's automotive sector could fall as much as 12% over 'three bad trading days,' if President Donald Trump imposes tariffs on European car manufacturers, one analyst told CNBC.
Trump threatened to impose 20% tariffs on European cars back in 2018, arguing there's a trade imbalance threatening the U.S.'s national security. The EU is the largest exporter of motor vehicles in the world, whereas the United States is the largest importer.
"If indeed we get U.S. car tariffs on imports from the euro zone — not just their announcement, you could forget our economic forecasts completely. No chance of a sustained pick-up in activity throughout the second half as we expect," Florian Hense, European economist at Berenberg bank, told CNBC via email.
"The euro zone growth engine has lost a lot of cyclical velocity in the past year, exposing vulnerabilities to slower Chinese growth, weaker global trade and structural problems in the German auto sector. The fear is that we are just one shock away from a recession," Lena Komileva, chief economist at G+Economics, told CNBC via email.could decide this week to postpone its decision on car tariffs and focus on the ongoing talks with China instead.
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