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Germany’s investors’ sentiment fades because of U.S. import tariffs

The sentiment of Germany’s investors faded this month, a poll revealed today, mirroring growing vagueness of the detriment the EU’s powerhouse might suffer in case new U.S. import tariffs turned into a trade war.

Recently announced by the U.S. import tariffs, which are to come into effect on Friday, imply 25% on steel and 10% on aluminum.

This action has stirred worries of retaliatory measures that might grow into a trade conflict and harm the economic recovery. Investors’ mood plunged to 5.1, the worst indication in over a year, whereas it stood at 17.8 in the preceding month, as a survey by the ZEW institute demonstrated.

The prediction averaged at 13.0 in a Reuters poll. The higher euro is harmful for the business prospects of Germany’s exporters as well, but the outlook for the economy in general stayed strongly upbeat regardless of the risks, said Achim Wambach of ZEW.

A special index gauging investors’ view of the economy’s state slightly fell to 90.7 from 92.3 in February. However it was a bit up from the prediction in the Reuters poll averaging at 90.0.

The economy ministry of Germany has said that if U.S. import tariffs on metals turn into an outright trade war, it could harm the global recovery, but the tariffs on their own will only produce minimum effect.

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