Germany’s growth story just took another hit from the same place that has been battering markets worldwide: energy. The ZEW indicator of economic sentiment for Germany fell to minus 17.2 in April from minus 0.5 in March, its weakest reading in more than three years, as investors and firms absorbed the spike in energy prices tied to the conflict in the Middle East.
The drop lands on top of a deeper policy problem. German sentiment is being squeezed just as businesses are trying to price in higher power costs, softer demand, and a less forgiving industrial backdrop. The ZEW survey, which tracks expectations from analysts and investors at banks, insurers and other companies, suggests the shock is not just hitting the immediate energy trade, but clouding the outlook for Europe’s biggest economy more broadly. That leaves Berlin with a familiar dilemma, growth support gets harder just as the cost base gets more volatile.
Across the Atlantic, trade friction is hardening into a negotiation over terms, not just tariffs. Canadian Prime Minister Mark Carney said Ottawa will not let Washington dictate the shape of the talks, while U.S. trade representative Jamieson Greer argued Canada is "doubling down on globalisation" as the U.S. tries to correct its costs. The two sides are staring at a 1 July USMCA review deadline, but formal Canada-U.S. talks have not even started, and both governments sound resigned to a long slog.
- Washington wants unresolved issues, including autos, metals and dairy quotas, folded into a broader deal.
- Ottawa says dairy is off the table, but says it has "solutions to most of what the Americans raise."
- If no deal is reached by July, the pact could face yearly reviews until its 2036 expiry, keeping companies in North America on edge.
