German exports sank more than anticipated in May as the value of shipments to the US plunged to their lowest level in more than three years amid President Donald Trump’s tariff threats.
Total exports declined 1.4 percent from the previous month, the statistics office said Tuesday. That’s worse than the - 0.5 percent median estimate in a Bloomberg survey, and followed a revised 1.6 percent decline in April.
Imports sank 3.8 percent, including a more than 10 percent drop in sales from the US. The trade balance increased to €18.4 billion ($21.6 billion) from a revised €15.7 billion.
ALSO READ: EU avoids US tariff letter, eyes concessions, EU sources say
The European Union is seeking a preliminary trade deal with the US this week that would allow it to lock in a 10 percent tariff rate beyond an Aug 1 deadline as the two sides hammer out a permanent agreement. Trump on Monday unveiled the first in a wave of promised letters that threaten to impose higher levies on key partners, but pushed off increased duties until at least next month.
READ MORE: EU says ready for trade deal with US but prepares for no-deal scenario
Germany is seen as particularly vulnerable to US tariffs and is still currently subject to sectoral levies on things like cars. Bundesbank President Joachim Nagel has even warned that Europe’s largest economy is in danger of suffering a recession due to the tariff fallout.
At the same time, plans by the new government to massively boost defense and infrastructure outlays have brought some optimism.
READ MORE: Von der Leyen says EU will be ready if US trade talks break down
Gross domestic product grew more than anticipated at the start of the year, but views differ as to whether momentum will fade or turn into a sustainable recovery. The 0.4 percent growth between January and March was partly down to firms and exporters front-running US levies, though private consumption and investment also surged.
Data on Monday showed industrial production unexpectedly rose in May, underpinning hopes that the economy can emerge from years of stagnation.
