Germany's economic sentiment sharply declined in August, reversing a three-month recovery and raising concerns over growth. The ZEW Indicator dropped to 34.7, missing expectations, while current conditions worsened. The downturn is linked to a controversial EU-US trade deal that disappointed experts and increased tariff burdens on key sectors. The eurozone also mirrored this decline, with revised growth expectations for the second half of the year. Market reactions were muted, with investors awaiting US inflation data.