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EU might target US tech firms in trade war
Merz wants to ease tensions with Washington

EU might target US tech firms in trade war

May 26, 2025
08:16 pm

What's the story

German Chancellor Friedrich Merz has hinted that the European Union (EU) could retaliate against US technology companies, if the ongoing trade conflict with Donald Trump's administration escalates. Speaking at the WDR Europaforum conference in Berlin, Merz emphasized his desire to reduce tariffs and ease tensions with Washington while also protecting EU interests.

Trade imbalance

Merz highlights US surplus in services trade with EU

Merz highlighted the trade imbalance between the US and EU, particularly the US's surplus in services trade. He said, "At the moment, we strongly protect US tech companies — also on taxes," adding that this could be changed but he doesn't want to escalate the conflict. The Chancellor stressed his support for European Commission President Ursula von der Leyen's approach toward these trade talks.

Tariff strategy

Merz emphasizes EU's cautious approach to tariffs

Merz also stressed on the EU's careful approach toward tariffs. He said, "We shouldn't react heedlessly and hectically," adding that while tariffs could hurt them, they would use this tool if nothing else worked. This comes as Trump has threatened a 50% tariff on EU imports starting July 9, a move that would affect $321 billion worth of trade in goods and lower US GDP by nearly 0.6%.

Retaliation

EU's response to Trump's tariff threat

In response to Trump's tariff threat, the EU has drawn up counter-tariffs on €21 billion ($23.9 billion) worth of US goods. These have been suspended until July but could be fast-tracked if talks break down. The bloc is also preparing another list targeting industrial goods such as Boeing aircraft, US-made cars and bourbon worth €95 billion in retaliation for Trump's "reciprocal" tariffs and automotive duties.