US President Trump announces new tariffs – alarming the EU. German Economics Minister Reiche is pushing for further negotiations. Associations and economists warn of serious consequences if they come into force.

US President Donald Trump announced tariffs of 30 percent on goods from the European Union starting August 1 – and the reactions followed swiftly. While EU Commission President Ursula von der Leyen signaled a willingness to negotiate but also promised countermeasures, German Economics Minister Katherina Reiche (CDU) hopes for a"pragmatic negotiation outcome" despite the new escalation.

The EU's remaining time is now about negotiating a solution with the US that focuses on the major points of conflict, Reiche said. The EU Commission has Germany's support for this negotiating approach. It also pointed out that the threatened US tariffs would not only hurt European exporters. Rather, they would also have"a strong impact on the economy and consumers on the other side of the Atlantic," Reiche explained.

EU wants to expand alternatives

Following the announcement of US tariffs, EU Council President António Costa emphasized the EU's unity. The European Union remains"determined, united, and ready to protect its interests," Costa stated. The EU will also continue to build strong trade partnerships worldwide.

The chairman of the EU Trade Committee, Bernd Lange, was more critical of Trump's letter. In an interview with the ARD studio in Brussels, he called it an"outrage." He added that intensive negotiations had been going on for three weeks."In a situation like this, it's not appropriate to increase the completely unjustified tariffs again."

On Monday, the first stage of the European countermeasures, amounting to around €21 billion, which the EU had previously suspended due to the negotiations, is also scheduled to come into force. The SPD MEP now demanded that these measures be implemented without fail:"Given this situation and this letter, it makes absolutely no sense to back down now."

Dutch Prime Minister Dick Schoof also criticized the announced US tariffs and called for unity in the EU. Trump's announcement was"worrying" and not the right way forward, he wrote on Platform X. The European Commission could count on the full support of the Netherlands to achieve a mutually beneficial outcome.

The Italian government, like Reiche, expressed confidence that a fair agreement can still be reached in the tariff dispute. It is crucial to focus on the negotiations, said Prime Minister Giorgia Meloni's office. Rome fully supports the EU Commission's efforts, which will be intensified in the coming days.

USA is Germany's most important trading partner

The Federation of German Industries (BDI) described Trump's measure as an alarm signal for industry on both sides of the Atlantic."A trade conflict between two such closely intertwined economic areas as the EU and the USA harms economic recovery, innovative strength, and ultimately trust in international cooperation," explained Wolfgang Niedermark, member of the BDI Executive Board."The few weeks until the tariffs come into effect on August 1 must be used for negotiations on an equal footing." The USA is Germany's most important trading partner.

The German Foreign Trade Association (BGA) called for tough negotiations between Europe and the US in the tariff dispute. Donald Trump's announcement of 30 percent tariffs is"a well-rehearsed part of the American president's negotiating strategy. Europe must not allow itself to be intimidated by this, but must soberly seek a solution at the negotiating table on equal terms," explained association president Dirk Jandura. Furthermore, Europe must reduce its dependence on the US market. A free trade zone with the ASEAN states and rapid ratification of the Mercosur agreement are necessary.

Tariffs could threaten the existence of many companies

The German Association of the Automotive Industry (VDA) said:"It is regrettable that a further escalation of the trade conflict is looming," explained VDA President Hildegard Müller."The costs for our companies are already in the billions – and the sum is growing with each day." Suppliers are also significantly affected by the additional tariffs announced on goods from Mexico. The EU and the US must now"find a solution as quickly as possible."

The German Engineering Federation (VDMA) believes that a 30 percent tariff on exports to the US would endanger the existence of numerous companies."Many companies could survive with 10 percent," VDMA President Bertram Kawlath told Politico magazine."But things look different at 30 percent." He also called for a stronger focus on Europe.

Economists expect a reversal

Economists Jens Südekum and Moritz Schularick expect that Trump's threat of a 30 percent tariff on EU goods is not the final word."Trump is known for repeatedly making strong statements and then backtracking," Südekum told the Frankfurter Allgemeine Zeitung (FAZ)."I have no reason to believe it will be any different this time," said the advisor to Federal Finance Minister Lars Klingbeil (SPD).

Moritz Schularick, president of the Kiel Institute for the World Economy, also told the Frankfurter Allgemeine Zeitung that he considers the likelihood of Trump backing down to be very high. However, if Trump does not back down, the German economy would be hit hard."Gross domestic product would grow by 0.5 to 0.6 percentage points less next year," Schularick predicts. However, this would not push Germany into recession due to the federal government's spending programs.