Trade cease-fire with Trump boosts German business optimism

August 27, 2018 - 1:31 am

FRANKFURT, Germany (AP) — A leading economic institute says its index of German business optimism rose in August thanks to an easing of trade tensions between the European Union and U.S. President Donald Trump.

The index compiled by the Munich-based Ifo institute rose to 103.8 points from 101.7 in July. The result was better than the 101.8 expected by market analysts.

Ifo President Clemens Fuest said Monday that "aside from a strong domestic economy the cease-fire in the trade conflict with the U.S. contributed to the better mood."

Trump had threatened to impose new tariffs, raising fears of a cycle of retaliation that could hurt trade and growth. But Trump agreed to hold off after talks with European Commission head Jean-Claude Juncker.

Germany, Europe's largest economy, gets much of its growth from exports.