The tariff hike on cars and trucks from the European Union announced by US President Donald Trump could cost Germany nearly 15 billion euros ($17.58 billion) in output, an economic institute told Reuters on Saturday.
The estimate from the Kiel Institute for the World Economy (IfW) highlights the exposure of the EU's largest economy to US import tariffs, which have already cost the German automotive industry billions.
"The effects would be substantial," IfW President Moritz Schularick said, with output losses rising to around 30 billion euros over the longer term, according to the institute's analysis.
Trump said on Friday he would increase the auto tariffs to 25% next week from a previously agreed 15%, saying the bloc had not complied with its trade deal with Washington.
"Germany's already sluggish growth rate would be hit hard," IfW economist Julian Hinz said.
The institute currently expects the German economy to grow by 0.8% this year.
Other European economies with significant automotive sectors - including Italy, Slovakia, and Sweden - are also likely to suffer significant losses, it added.
The German economy minister's chief adviser advised caution towards Trump.
"The EU should simply wait and see for now," Jens Suedekum told Reuters.
"It is well known that Trump is quick to suspend or withdraw his grandiose tariff threats."
The president must explain why he thinks the EU is not complying with the existing trade agreement, Suedekum said, adding that it was also not clear whether there was a legal basis for the latest tariff threat.
"It all seems quite impulsive," the adviser said.
