Merz warns US-EU tariffs will hurt German economy and trade

Following the agreement in principle in the tariff dispute between the US and the EU, Chancellor Friedrich Merz (CDU) warned of severe negative consequences for the German economy. "The German economy will suffer considerable damage from these tariffs," he said on Monday afternoon in Berlin.

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At the same time, the impact will not be limited to Germany and Europe; "we will also see the consequences of this trade policy in America," Merz continued. Not only is a higher inflation rate to be feared, but the tariffs are also likely to "impact transatlantic trade overall."

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On Sunday, after months of tough negotiations, the US and the EU announced an agreement on a trade deal that, according to US President Donald Trump, provides for a 15 percent tariff on most EU products. This is less than the 30 percent threatened by Trump, but significantly higher than before his tariff offensive. In addition, the EU is to purchase significantly more US liquefied natural gas, and European companies are to invest in the US.

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However, many detailed questions surrounding the agreement initially remained unresolved or at least unclear, such as the level of tariffs on the EU side that would be levied on imports from the US in the future. However, the outlines of the basic agreement already appeared highly one-sided to many observers – to the detriment of the Europeans.

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Merz also said he was "not satisfied with the compromise reached in the sense of 'this is fine now,'" adding: "This result cannot satisfy us, but it was the best that could be achieved in the given situation." Clearly, more was not achievable given the initial situation with the US.

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