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Any escalation of trade friction involving the United States could cause a major recession in Germany and Europe, Germany's leading economic institutes said on Thursday.
The institutes also said U.S. President Donald Trump's threat to impose tariffs on car imports from the European Union would cost jobs and harm productivity and prosperity in Germany.
"Retaliatory measures by the EU would probably ease the economic downturn in the EU and cause a major recession in the United States," the institutes said in a report, which had been flagged by Reuters on Wednesday.
The EU has said it would respond in kind if Trump imposed further car tariffs while the two sides discuss how they could cut trade barriers.
China's foreign ministry said on Thursday that Beijing does not interfere in other countries' internal affairs, after U.S. President Donald Trump accused it of seeking to meddle in the Nov. 6 U.S. congressional elections.The international community is clear which country interferes most in other countries' affairs, ministry spokesman Geng Shuang said at a regular briefing in Beijing.Geng also urged the United States to stop doing things that damaged relations with China.Trump on Wednesday told a U.N. Security Council meeting that Beijing was interfering because they did not want his Republican Party to do well, given the party's pugnacious stance on trade. China executes man who killed nine in school stabbingChina says hopes trade frictions with U.S. can be resolvedChina hopes its trade frictions with the United States can be resolved, but it has prepared for all eventualities, the commerce ministry said on Thursday.China's economy will not collapse under Washington's threats and U.S. officials should not underestimate China's determination and capabilities, the ministry said.China says opposes provocative U.S. military aircraft action in S.China SeaChina is resolutely opposed to U.S. military aircraft taking provocative actions in South China Sea and demanded the U.S. take steps to improve military relations, China's defence ministry said on Thursday.Defence ministry spokesman Ren Guoqiang made the comments at a regular monthly news briefing.
China says does not interfere in other countries' internal affairs
Significant and widespread further tariff measures from Washington, meanwhile, "would probably trigger a major recession in Germany and Europe," the report states.
The institutes gave no timeframe for that scenario.
They cut their 2018 GDP growth forecast to 1.7 percent from 2.2 percent.
The move comes after the BDI industry association cut its 2018 forecast to 2.0 percent from 2.25 percent on Tuesday, citing weaker demand for German exports due to U.S. trade policy and Brexit, as well a threat to the economy from xenophobia at home.
Germany, where one in three jobs depend on exports, would be hard hit by any U.S. tariffs on car imports given the large size of its automotive sector. Tensions rose last month after Trump rejected an EU offer to eliminate auto tariffs.