German Chancellor Friedrich Merz has threatened the EU will move against massive US tech companies if American President Donald Trump tries to impose high tariffs on EU imports.
Merz said that Europe needs to be prepared to defend itself in the event of a souring trade conflict, addressing the WDR Europa forum in Berlin on Monday.
“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.”
The threat follows Trump’s recent warning to slap a 50% tariff on EU goods starting June 1. However, the move was put on hold after a phone call with European Commission President Ursula von der Leyen. The new deadline is now set for July 9.
But tension remains high. Trump accuses Europe of exploiting the US and demands the EU slash its goods surplus, dismantle tax barriers, and ease regulations for American companies.
EU plans retaliatory tariffs in response to Trump
In response, the EU has lined up several layers of countermeasures. One plan targets €21 billion ($23.9 billion) worth of US goods—like motorcycles, whiskey, and orange juice—and could be automatically triggered if trade talks fail.
Brussels is also working on a second, much larger list. If Trump moves forward with the 50% tariffs, the EU plans to hit back with tariffs on €95 billion of American products, including US-made cars, Boeing planes, and bourbon whiskey.
European Commission officials have said they will look into digital service taxes and create tighter regulations for US tech titans operating in the EU. These companies, including Google, Amazon, Apple, and Meta, would face new restrictions if the trade war ramped up.
Bernd Lange, Chair of the European Parliament’s Trade Committee, said that the EU did not want confrontation, but if it had to take action, the tech sector would be in the bull’s eye.
The US has a significant surplus in digital services trade with Europe, according to a 2025 Goldman Sachs report. Should the EU limit access or raise taxes on American platforms, billions of dollars in annual revenue for American companies may be up for grabs.
Merz leads EU push for unity and restraint
Chancellor Merz emphasized that Germany would not be going it alone.
He promised full backing for Ursula von der Leyen’s direction of the EU and said trade talks had to be kept under EU control and not added to piecemeal by national side deals.
Chancellor Merz told German radio that the EU must not react in a hair-trigger, panicked, or hectic manner. He said that tariffs would hurt Europe but added that the bloc would use tariffs as a last resort if no other options remained.
Merz admitted that he had initially believed he could build good relations with Donald Trump but said he had since moderated his message during his time in office. He noted that the current situation shows Europe and the United States now have very different approaches to trade.
Merz said that, from the European perspective, tariffs harm everyone. He explained that Trump views them as a way to protect his own economy and sees trade as a zero-sum game.
Trump has made doubling down on tariffs a cornerstone of his economic strategy. He has made repeated charges, in rallies and recent interviews, that the EU has been “cheating” the US for decades.
According to Bloomberg Economics, Trump’s threat of 50% tariffs would apply to $321 billion of EU-US trade. That could reduce US GDP by almost 0.6% and lift consumer prices by over 0.3%.
