The German economy is expected to post zero growth in 2025, outgoing economy minister Robert Habeck said. He blamed US President Donald Trump's trade policies.

"US trade policy in the form of threats and the imposition of tariffs has a direct impact on the German economy, which is highly export-oriented," he said, presenting the forecast.

Previously, the German government expected a slight GDP growth of 0.3% this year, after the leading European economy has been contracting over the past two years.

The United States, which is a key destination for German products from cars to chemicals, is Germany's biggest trading partner and last year took about 10 percent of its exports.

Under the Trump administration, the United States is now imposing a 10 percent tariff on European Union exports to the country, after earlier announcing a higher 20 percent rate, which has since been suspended.

"Tariffs and trade policy turmoil hit the German economy harder than other countries," Habeck said.

"We depend on open markets, functioning markets and a globalised world. That is what has made this country rich," he told a news conference in Berlin.

German GDP shrank by 0.3 percent in 2023 and 0.2 percent in 2024, suffering from higher energy prices after Russia's full-scale invasion of Ukraine.

It has also been hit by increasingly fierce Chinese competition in key industries such as automotive and machinery.

"I would say we are going through a paradigm shift as far as the main winners for the German economy are concerned," Habeck said.

"Our big trading partners, China and the US, as well as our neighbour Russia, are causing us problems." | BGNES