There is a risk of protectionism spreading to other sectors and countries as a result of U.S. President Donald Trump's announced tariffs on steel and aluminum, an expert of German research institute ifo said on Monday.

"This could undermine the World Trade Organization (WTO) and seriously jeopardize the progress achieved in liberalizing world trade over the past decades," said Gabriel Felbermayr, director of the ifo Center for International Economics.

"Trump's actions seem quite arbitrary...The most affected EU country would be Germany which would have to pay new tariffs of 1.7 billion U.S. dollars a year on steel and aluminum exports," Felbermayr added.

According to him, Germany's total exports of steel and aluminum to the U.S. amount to 3.1 billion U.S. dollars. The exports of European Union total about 6.5 billion U.S. dollars.

"The justification for these U.S. tariffs is also dubious," Felbermayr noted. In the case of U.S. steel imports, a blanket use of protective tariffs can only be justified under the General Agreement on Tariffs and Trade if a sharp and sudden increase in import volumes can be determined.

In fact, U.S. steel imports have grown strongly since 2009, but only to the level of 2006 before the economic crisis. Quantities of aluminum imports have remained relatively unchanged over the long period. A flood of imports can thus not be determined for either product.

The ifo Business Climate Index of the Munich-based think tank is considered the most important barometer for the German economy.