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Scoring an own goal

As countries choose between retaliation and deal-making, tariffs seen as damaging even for US

Updated: 2025-04-11 10:40
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The tower storage facility of German carmaker Volkswagen in Wolfsburg, Germany, on March 11. The European Union must "respond firmly" to US tariffs, Robert Habeck, German economy minister said on March 27. RONNY HARTMANN/AFP

Germany's leading economic institutes have slashed their growth outlook for 2025 in consideration of Trump's tariffs on steel, aluminium and cars.

Yet some other trading partners of the US remained cautious against the intimidation of the world's biggest economy, fearing that slapping their own tariffs on US goods would only make things worse.

Analysts say there's little to be gained from an all-out trade war, since higher tariffs can restrain growth and raise inflation.

The head of the World Trade Organization warned that US protectionist measures will likely cause global trade volumes to drop by about 1 percent this year.

"I am deeply concerned about this decline and the potential for escalation into a tariff war with a cycle of retaliatory measures that lead to further declines in trade," said WTO Director General Ngozi Okonjo-Iweala.

Joe Brusuelas, chief economist of consulting firm RSM US, warned the shift in tariff policy may not be enough to stave off a recession. And in a note to clients, Goldman Sachs economists projected a 45 percent chance of a recession over the next 12 months.

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