German and Euro Area economic sentiment plummeted to multi-year lows after US President Donald Trump’s “Liberation Day” speech.
The ZEW Indicator of Economic Sentiment for Germany dropped to minus 14.0 points, or 65.6 points below the previous month’s reading, the non-profit ZEW Institute said on Tuesday. That was the lowest level since the Russian invasion of Ukraine in 2022.
ZEW President Achim Wambach said the “erratic changes” in the US trade policy under Trump had weighed “heavily on expectations” in Europe’s largest economy.
“It is not only the consequences the announced reciprocal tariffs may have on global trade,” Wambach said. It is “also the dynamics of their changes that have massively increased global uncertainty,” he added.
Trump’s Policies Will Impact German Export-Intensive Sectors
Trump’s economic policy shift will likely impact German export-intensive sectors, such as the automobile and chemical industries, Zew said. The policies could affect metal, steel and mechanical engineering sectors, it added.
Following Trump’s April 2 speech, German conglomerate Siemens (OTCPK: SIEGY) dropped over 22%, touching €162.38 before reversing above €180. Defense industry firm Rheinmetall (OTCPK: RNMBF) saw a bigger drop, reaching a €933 low before reversing and making a new all-time high at €1497 today.
While Siemens has been a high-volatility stock (1.16 Beta), this market action is atypical for Rheinmetall, which is more stable than the broad market (0.46 Beta).
“For a minute, German investors believed they could shine with their country, providing billions of euros in defense and infrastructure spending,” Jeroen Blokland, founder of the Netherlands-based Blokland Smart Multi-Asset Fund, wrote on X.
“But the man on the other side of the Atlantic decided differently, causing a collapse in German investor …Full story available on Benzinga.com
