Germany was the only G7 economy that failed to grow for the last two years, and is on track for a third year without growth in 2025.The German government cut its economic growth forecast to zero citing the impact of US President Donald Trump's trade policies . Also Read | What Is Simla Agreement 1972? All You Need To Know As Pakistan Suspends Simla Pact After India Downgrades Diplomatic Ties Following Pahalgam Terror Attack. "There is above all one reason for this, namely Donald Trump's trade policy and the effects of the trade policy on Germany," outgoing Economy Minister Robert Habeck said. Also Read | Pahalgam Terror Attack: Busy Day at Attari Border As Indians, Pakistanis Return Home (Watch Videos). He said there was little hope of relief for Europe’s largest economy following two years of recession in 2023 and 2024. The German economy contracted by 0.3% in 2023 and by 0.2% in 2024. How does Trump tariffs affect the German economy The European Union (EU) was negotiating with Washington to avoid a further 20% proposed US tariffs on goods from the European Union. The Unites States is Germany’s largest trading partner and Habeck said Trump’s tariff's are "hitting the German economy harder than other nations." "The US trade policy of threatening and imposing tariffs has a direct impact on the German economy, which is very export-oriented," Habeck said. The US tariffs, featuring a blanket 10% duty on all imports and 25% levies on cars, aluminum, and steel, are set to hit Germany's major export-based sectors like automotive and pharmaceutical industries hard. It has also been dealing with ncreasingly fierce Chinese competition in key industries such as automobiles and machinery. "Our big trade partners, China and the USA, and our neighbour, Russia, are causing us problems," Habeck said. More to come on this developing story Edited by: Rana Taha