German Officials Cut 2026-2030 Tax Revenue Forecast by €70 Billion Amid US-Iran War

Lars Klingbeil said the US president's actions in the region had caused a "global energy shock".

German officials have cut the projected tax revenue for 2026-2030 by around €70 billion ($82 billion; £60.52 billion). The downgrade "shows just how much the war in Iran is harming our economy," Klingbeil said in Berlin.

Last month, German Chancellor Friedrich Merz infuriated Trump with his suggestion that the White House had been "humiliated" by Iranian negotiators. Those comments prompted the US president to threaten to withdraw thousands of US troops from bases in Germany.

Since taking office a year ago, Chancellor Merz has often indicated that Trump's policies have changed the traditionally close relationship between the US and Europe.

In February, for instance, Merz said "a deep divide has opened between Europe and the United States." But the German chancellor has visited the White House twice in a year in an effort to smooth the strains in trans-Atlantic ties.

Alongside other European countries, Germany has been critical of the war that the US and Israel launched against Iran on February 28, which has considerably raised fears of a global economic downturn.

Germany's coalition government has been struggling to boost the economy which has been stagnant for years, with high energy costs and a weak demand for exports playing a significant role.

Last month, Merz told students that "the Americans clearly have no strategy" and he could not see "what strategic exit" they were going to choose.

"The Iranians are obviously very skilled at negotiating, or rather, very skilful at not negotiating, letting the Americans travel to Islamabad and then leave again without any result," he said.

Trump responded the following day with a post to Truth Social, where he said Merz thought it was "OK for Iran to have a Nuclear Weapon" and "doesn't know what he's talking about."

"No wonder Germany is doing so poorly, both Economically, and otherwise!" the post read.

Dragging the row on, Trump later suggested Merz should focus more on "fixing his broken Country, especially Immigration and Energy, and less time interfering with those that are getting rid of the Iran Nuclear threat".

Earlier this month and just days after Merz's initial comments, the US Defense Department announced a plan to withdraw 5,000 troops from Germany. Officials have attributed the order to Defense Secretary Pete Hegseth.

The US military deployment in Germany is by far its biggest in Europe, with about 12,000 troops in Italy and a further 10,000 in the UK.

Trump is a longtime critic of the NATO alliance and has berated allies for not joining in his plans to reopen the strategic shipping route through the Strait of Hormuz, which has been effectively closed by Iran.

About 20 percent of the world's oil and liquefied natural gas usually passes through the Strait and hostilities have sent global fuel prices soaring.