Economic stagnation, unemployment rate skyrockets, warning that the US will "harm others and itself"

Unemployment in Germany continues to worsen as the Central European country has just been hit by new US tariffs.

Volkswagen is among the German companies that have announced job cuts recently. (Source: AFP)

The number of unemployed people rose by 26,000 this month, bringing the total to 2.92 million, the Federal Labor Office said, the highest monthly increase since October 2024 and more than double analysts' forecasts for a rise of 10,000.

The seasonally adjusted unemployment rate edged up to 6.3 percent from 6.2 percent the previous month, slightly above market expectations.

"March usually marks the beginning of a seasonal recovery in the labor market. However, this year the economic downturn is slowing down this process significantly," said Andrea Nahles, head of the German Federal Employment Agency.

Germany has endured two consecutive years of economic recession and is still struggling with persistent weaknesses, especially in the industrial manufacturing sector.

Figures from the German Federal Labor Office show that the number of job vacancies fell to 643,000 this month, 64,000 fewer than in the same month last year, reflecting a weakening in demand for labor.

The German car industry, a key pillar of the economy, is under severe pressure. Major companies such as Volkswagen have been forced to cut jobs to cope with falling demand. This week, the situation became more serious when US President Donald Trump announced a 25% tariff on imported cars into the US, a blow to German carmakers.

Regarding this issue, on March 28, Reuters news agency quoted German Finance Minister Joerg Kukies as saying that Berlin is trying to prevent an escalating trade war.

"Higher tariffs will hit German automakers and the entire German economy particularly hard, but they will also hurt the U.S. economy, as they will make imports more expensive and raise prices for U.S. consumers," Kukies said after meeting with his U.S. counterpart Scott Bessent and other members of the Trump administration in Washington.

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