Germany’s Merz Says US Tech Perks Could Be Target in Trade War #NewsGerman

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The European Union could retaliate against US technology companies if the trade conflict with Donald Trump’s administration escalates, German Chancellor Friedrich Merz said.

While the leader of Europe’s largest economy aims to reduce tariffs and defuse tensions with the White House, he said that the bloc would need to protect its interests and pointed to the US surplus in services trade with the EU.

“At the moment, we strongly protect US tech companies — also on taxes,” Merz said Monday in Berlin at the WDR Europaforum conference. “That can be changed, but I don’t want to escalate this conflict. I want to solve it together.”

Trade talks between the European Union and the US are at a delicate point. President Trump last week threatened to impose 50% tariffs on EU imports as of June 1, only to move the deadline back to July 9 after a Sunday phone call with European Commission President Ursula von der Leyen.

Merz said he fully supports von der Leyen’s approach and reaffirmed his stance that Germany wouldn’t enter side deals but allow the EU to handle trade matters. He said the bloc would act if necessary.

“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.”

Trump says the EU takes advantage of the US and has called on the bloc to reduce its surplus in goods, remove barriers to trade, such as its value-added tax, and get rid of regulatory hurdles for businesses. The EU has said it’s willing to negotiate with the White House, but will retaliate if a satisfactory solution can’t be found.

Trump’s 50% tariff threat would hit $321 billion worth of trade in goods, lowering US gross domestic product by close to 0.6% and boosting prices by more than 0.3%, according to Bloomberg Economics calculations.

The EU has prepared retaliatory tariffs on €21 billion ($23.9 billion) of US goods in response to some of Trump’s metals levies, which have been paused until July. Implementation could be accelerated in the event of a breakdown in talks.

The bloc is also preparing an additional list of tariffs on €95 billion of American products in case negotiations fail. Those measures, which are in response to Trump’s “reciprocal” levies and automotive duties would target industrial goods including Boeing Co. aircraft, US-made cars and bourbon.