The risk of a recession in Europe’s biggest economy rose significantly between March and April amid the fallout over President Trump’s increasingly restrictive stance on global trade, researchers said Monday. While economists with the German Institute for Macroeconomics and Economic Research (IMK) saw only a 6.8 percent likelihood of a recession within three months in March, they now believe that an imminent economic downturn is 32.4 percent likely.

“President Trump’s flirtation with protectionism is sending out shock waves that are not only affecting financial markets, but also the German economy,” said Gustav Horn, the research director of IMK, which is part of a foundation with ties to several unions.

Germany is considered Europe’s economic powerhouse, and its economic boom has lasted five years even as the rest of the continent has struggled. Unemployment is so low in Germany that companies have to routinely turn down orders because of a lack of workers, and the government recently celebrated a record tax revenue.

But with its export-driven economy and large trade surplus, the country has repeatedly drawn the ire of Trump, who has lashed out at the European ally for allegedly exploiting the U.S. economy. Germany has rejected Trump’s accusations, saying German investments in the United States employ hundreds of thousands of workers there.

Trump’s concerns are hardly new — he directly confronted Germany on Twitter in May, for instance. But his decision to hit China with additional tariffs in March suddenly gave his previous threats much more weight, which explains why his longtime stance on German trade is only now affecting growth forecasts.

Germany is also on a “Monitoring List” compiled by the U.S. Treasury Department under the title “Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States,” along with Japan, China, South Korea, Switzerland and India. Even though the report does not conclude that any of those nations deliberately manipulate currencies, Trump took to Twitter on Monday to accuse China and Russia of doing exactly that to gain trade advantages.

President Trump said that "at a certain point they run out of bullets," when talking about rising trade tension with China, but refused to call it a trade war. (The Washington Post)

Trump has not directly targeted Germany with tariffs — but researchers say his protectionist threats alone have been enough to bring uncertainty to financial markets and exporters. It also remains unclear whether Trump may eventually expand tariffs to allies like Germany after all. “We don’t yet know whether U.S. punitive tariffs will eventually also apply to European goods, but concerns are mounting,” Horn said.

In Germany’s case, international outrage over dampened growth prospects would probably be limited, however.

While European leaders may go to great lengths to emphasize how little they have in common with Trump, many share his concerns that Germany’s strength has come at a high cost for the entire continent. The strongest European economy has disproportionately benefited from the euro zone, in which it shares a common currency with many economically weaker nations.

If Germany had its own currency, it would be valued far higher than the euro. While the euro’s relatively low value is benefiting Germany’s export-driven economy, it has done little to revive southern Europe’s underperforming counterparts, which have also struggled under harsh austerity measures.

Trump is not the first U.S. leader to express concerns about Germany’s lucrative trade surplus and its parallel insistence on more austere budget policies. The Obama administration similarly argued that Germany should stimulate consumer demand and increase imports from other E.U. countries, rather than strengthen its own export industry.

Echoing such assessments, the IMK researchers urged Chancellor Angela Merkel on Monday to boost spending to strengthen the domestic economy.

“There’d be two positive repercussions if we strengthened domestic demand in Germany and Europe: Firstly, growth would react less to turmoil on global export markets. Secondly, this would lead to a lower German trade surplus — thus taking the wind out of Trump’s sails,” Horn said.

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