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Mar 20, 8:23 AM EDT

Trade war fears weigh on investor sentiment in Germany

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FRANKFURT, Germany (AP) -- Jitters over a possible U.S.-led trade war appear to be worrying investment professionals in export-oriented Germany.

The ZEW index of economic sentiment sagged to 5.1 points in March from 17.8 points in February. The main reason was a more pessimistic outlook for coming months, while assessments of how things are currently slipped by less.

The survey is based on interviews with investment analysts on how they see things shaping up in Europe's largest economy.

The ZEW research institute in Munich said Tuesday that "concerns over a U.S.-led global trade conflict have made the experts more cautious in their prognoses. "

New import taxes on steel and aluminum proposed by U.S. President Donald Trump have raised concerns that other trade partners, including the European Union, may retaliate. The issue is of particular concern in Germany, where the economy runs on exports of automobiles and machinery. Exports were 46 percent of annual economic output in 2016, according to World Bank figures. The comparable figure for the United States was 12 percent.

The ZEW survey represents sentiment among market professionals rather than among industrial executives.

The head of the European Central Bank, Mario Draghi, has said that the initial impact of the proposed tariffs on steel and aluminum would be small. The impact on the economy of the 19 countries that use the euro currency, however, would be much greater if Trump's move leads to retaliation by other trade partners and restrictions expand to other categories of goods. Trump has tweeted that if the EU retaliates the U.S. could tax imports of European cars.

The EU has published a list of goods it could target. They include sweet corn, peanut butter, orange juice, cranberries, bourbon, cigars, chewing tobacco, makeup, jeans, flat-rolled steel, leather shoes, sailboats and motorcycles.

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