German investor sentiment slumped to its lowest level since September 2016 as concern intensified that Europe’s largest economy could be hurt by a global trade war and a strengthening euro.

The ZEW Center for European Economic Research in Mannheim said on Tuesday that its monthly index of investor expectations fell to 5.1 in March from 17.8. Economists in a Bloomberg survey predicted a drop to 13.

“Concerns over a US-led global trade conflict have made the experts more cautious in their prognoses,” ZEW President Achim Wambach said in a statement. “The strong euro is also hampering the economic outlook for Germany, a nation reliant on exports.”

Chancellor Angela Merkel is intensifying efforts to thwart a brewing trade war after the U.S. imposed tariffs on steel and aluminum and threatened to tax foreign cars, a move that could undermine Germany’s export-driven economy. Economy Minister Peter Altmaier, a close ally of the chancellor, said he’s more optimistic that a serious trade conflict can be averted after speaking to officials in Washington on Monday.

Germany’s DAX stock index, which includes major exporters like Siemens AG and Volkswagen AG, is poised for its second monthly decline in March, while the euro has climbed almost 15 percent against the dollar in the past year.

“German equities were some of the hardest hit when the U.S. administration announced that it would impose tariffs on metal imports,” Stephen Brown, an economist at Capital Economics Ltd. in London, said in a note. “The tariffs will have only a small direct impact, but Germany would be straight in the firing line if a tit-for-tat trade war prompted the U.S. to impose tariffs on automotive imports.”

Recent figures for industrial production, exports and factory orders suggest German growth is moderating. While the Bundesbank expects the strong upturn to continue in the first quarter as companies work through their backlog of orders, it said on Monday that a noticeable dampening of expectations is likely to be felt in the next three months.

ZEW’s gauge of current conditions in Germany slipped to 90.7 from 92.3. A measure of expectations for the euro area dropped to 13.4 from 29.3. The survey of 220 analysts was conducted between March 5 and March 19.