The US President has triggered a bitter trade war with the likes of Europe, China and Canada by imposing huge import tariffs on a number of goods, including steel and aluminium.
He has accused them of unfair trade practices and insists the tariffs are aimed at protecting American jobs.
Speaking to German newspaper Bild am Sonntag, Economy Minister Peter Altmaier took aim at the US President, claiming consumers were taking the brunt of his import tariffs because they are driving up prices.
He said: “This trade war is slowing down and destroying economic growth – and it creates new uncertainties.”
But Mr Altmaier reserved praise for the agreement reached by European Commission President Jean-Claude Juncker during a meeting on trade with Mr Trump in Washington last month, claiming the interim deal had saved hundreds of thousands of jobs in Europe.
The US and EU are embroiled in a trade war after Donald Trump imposed 20 percent tariffs on aluminium and steel imports, with Brussels retaliating with tariffs of its own.
He had also threatened to carry through with a promise to slap the EU with more tariffs on car imports until the agreement was reached with Mr Juncker to hold off taking action.
But the German Economy Minister warned that this should only be seen as a stepping stone to a global tariff relationship that faces much repair work.
He said: “The agreement between the EU and the US can only be the first step.
“Our goal is a global trade order with lower tariffs, less protectionism and open markets.”
Europe has been further angered with Mr Trump’s determination to push ahead with huge economic sanctions on Tehran, which will likely hit European companies, following his decision to withdraw the US from the 2015 Iran nuclear deal in June.
Last week, Mr Trump piled pressure on EU leaders by warning that if they ignore the newly imposed sanctions on Iran, they can forget about trading with the US.
He appeared to be responding to a joint statement released by all 28 European Union member states, including the UK, France and Germany, which were also part of the 2015 nuclear deal along with Russia and China.
Signatories, including UK Foreign Secretary Jeremy Hunt, expressed “deep regret” at the US move.
He said: “We won’t let Washington dictate to us with whom we can do business and we therefore stick to the Vienna Nuclear Agreement so that Iran cannot build atomic weapons.”
Oil giant Total, as well as car manufacturers Renault, Daimer and PSA, are among a host of European companies that have suspended investment plans in Iran following the promise of US sanctions.
German business associations have warned that companies are increasingly suffering from Mr Trump’s stringent trade strategy, as well as the tariffs he is imposing in China in a separate escalating trade war.
Mr Altmaier said German companies should be allowed to invest as much as they want in Iran, and that the country’s Government is looking for ways, along with its European allies, to ensure that financial transactions could still take place.
Despite the trade wars clouding the outlook for Germany, the Economy Minister is still expecting strong growth this year because of increased domestic demand, record-high employment and rising wages.
On Tuesday, the Federal Statistics Office are publishing preliminary GDP figures for the second quarter, with analysts forecasting growth to edge up from 0.3 percent in the first quarter to 0.4 percent in the most recent three month period.
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