Germany, U.S. Tech Trade Tensions Could Lead to EU Action on American Tech

Tensions in the Germany-US tech trade relationship could spark action against major American technology companies, Chancellor Friedrich Merz has said. He spoke at the WDR Europaforum in Berlin, where he said that the European Union wants to reduce tariffs and avoid conflict. However, he added that the EU must be ready to protect its interests, as reported by Yahoo Finance.

The warning comes at a sensitive time for transatlantic trade talks. US President Donald Trump recently threatened to impose 50% tariffs on European goods starting June 1.

Merz Says EU Could Target US Tech in Trade Dispute

Friedrich Merz, the Chancellor of Germany, has raised concerns about the current tech trade tensions between the United States and the European Union. He hinted that American tech companies could face retaliation if the conflict with the US worsens.

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

Merz also pointed to the US’s large surplus in services trade with the EU. He stressed that although the EU prefers peaceful solutions, it must stand firm if the situation demands it.

“We shouldn’t react heedlessly and hectically. In our view, tariffs would hurt us. But if we can’t do anything else, we would need to use this tool,” he said.

Before becoming chancellor, Merz believed he could build a strong working relationship with Donald Trump. But now, he has shifted to a more cautious tone. The two leaders have differing views, especially on tariffs.

“In the European view, they’re good for no one. For Trump, tariffs are protection for his economy and are a type of zero-sum game: When the European economy does worse, then it’s better for us,” Merz said.

EU Prepares to Respond if US Tariffs Take Effect

The European Union is already preparing a list of countermeasures. If Trump moves forward with his tariff threats, the EU is ready to respond. According to reports, the US tariffs could affect $321 billion worth of European goods. This would lower US GDP by nearly 0.6% and increase consumer prices by more than 0.3%, based on calculations from Bloomberg Economics.

To protect itself, the EU has lined up retaliatory tariffs on $23.9 billion worth of US goods. These were planned in response to US tariffs on metals, which have been paused until July. However, if negotiations break down, the EU could quickly track these measures.

Additionally, the EU is working on a second, larger set of tariffs worth $103.55 billion. These would target a broader range of American products, such as cars, aircraft Boeing, and bourbon. These steps are meant to respond to US moves like the “reciprocal” levies and potential auto duties.

Despite the rising tensions, EU leaders, including Merz and von der Leyen, continue to support a unified European approach. Germany has refused to make side deals with the US and wants to let the EU handle all trade matters as a single bloc.

The Germany-US technology trade war is just one part of a bigger picture of rising transatlantic trade tensions. While both sides still express a desire to talk, the situation remains delicate. As the July 9 deadline approaches, the world is watching to see whether cooperation or conflict will shape the future of tech and trade between the US and Europe.