The European Union has indicated it could retaliate against American technology companies if trade tensions with the Trump administration worsen, German Chancellor Friedrich Merz warned. While aiming to reduce tariffs and ease friction with the US, Merz stressed the EU must safeguard its interests amid ongoing disputes over trade imbalances.
At the WDR Europaforum conference in Berlin, Merz acknowledged that the EU currently offers strong protection to US tech companies, including tax benefits. “That can be changed, but I don’t want to escalate this conflict. I want to solve it together,” he said.
Trade negotiations between the US and the EU remain fragile. Last week, President Trump threatened to impose a 50% tariff on European imports starting June 1, though the deadline was postponed to July 9 after talks with European Commission President Ursula von der Leyen. Merz fully supports von der Leyen’s approach and emphasized that Germany would not pursue separate agreements but back the EU’s unified trade stance.
“We shouldn’t react heedlessly and hectically,” Merz said. “In our view tariffs would hurt us. But if we can’t do anything else, we would need to use this tool.”
According to Bloomberg, the EU is preparing retaliatory tariffs on €21 billion ($23.9 billion) worth of US goods in response to the current metals levies, which have been paused until July.
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CNBC TV18 reports that an additional list of tariffs covering €95 billion of American products, including Boeing aircraft, US-made cars, and bourbon, could be implemented if trade talks fail.
Trump argues that the EU takes advantage of the US by maintaining a surplus in goods and insists on reducing trade barriers such as the value-added tax and regulatory hurdles. The US president’s threat to impose tariffs on $321 billion worth of EU goods is projected to reduce US GDP by nearly 0.6% while increasing consumer prices by over 0.3%, based on Bloomberg Economics data.
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Before assuming office, Merz was optimistic about building strong relations with Trump, but his tone has cooled due to several disagreements, including approaches to Russia and tariffs. “In the European view, they’re good for no one,” Merz remarked. “For Trump, tariffs are protection for his own economy and are a type of zero-sum game: ‘when the European economy does worse, then it’s better for us’.”
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Disclaimer: This article is based solely on information provided by the referenced sources. No additional commentary or personal opinions have been added. The content aims to present the facts accurately and objectively.
