Trump’s Global Tariff Offensive Hits Germany Hard as EU Struggles to Respond

Economic Shock from New US Tariffs Spreads Worldwide

The United States has unleashed a sweeping new wave of global tariffs, with President Donald Trump declaring an economic realignment aimed at reshaping the structure of international trade. More than 50 countries have reportedly reached out to the White House seeking tariff exemptions, according to top US economic officials. The new policy has already triggered market volatility, growing diplomatic tension, and economic disruption across multiple sectors—especially in export-heavy economies like Germany.

While the US government downplays the domestic impact of the tariffs, economic advisors such as National Economic Council Director Kevin Hassett and Treasury Secretary Scott Bessent have admitted that many countries are feeling the pressure. “These tariffs are designed as maximum leverage,” Bessent stated, adding that the administration is open to talks—but only on credible terms.

Germany Among the Most Affected Exporters

For Germany, one of the world’s leading export nations, the consequences are already materializing. The German Institute for Economic Research (DIW) estimates that the total cost of the US tariffs to Germany could reach up to €180 billion between 2025 and 2028. Critical industries, including automotive, machinery, and manufacturing, are reporting sharp declines in US demand.

German firms heavily involved in US markets are particularly exposed. For example, fan and ventilation systems manufacturer EBM-Papst, which generates around 15 percent of its revenue from the US, now expects rising costs for nearly half of its US product portfolio. The company is already considering expanding operations in the United States—a scenario aligned with Washington’s strategy to bring manufacturing jobs back to American soil.

Europe Struggles to Present a Unified Response

In Brussels, EU trade ministers are in urgent talks over how to respond. While there is consensus that retaliatory measures may be necessary, the EU’s 27 member states remain divided over strategy. Countries with strong agricultural sectors view the issue differently than those with major automobile industries. This internal fragmentation weakens Europe’s negotiating power at a time when coordinated action is crucial.

Canada has already responded with consumer-led boycotts, including bans on US products and travel. In contrast, the EU is still weighing its options. A confidential draft list of over 100 countermeasures is under review, potentially targeting US goods like whiskey, motorcycles, and digital services. But analysts warn that retaliation could further destabilize global markets and damage EU economies.

Berlin Balances Diplomacy and Economic Pressure

German Chancellor Olaf Scholz has kept in close contact with European institutions, emphasizing the need to avoid an all-out trade war. Nevertheless, Berlin is under growing pressure from both industry and political parties to take a firmer stance.

Former Economics Minister Robert Habeck criticized Trump’s protectionist agenda, calling it a reversal of the cooperative principles that once underpinned global trade. “The US has been one of the biggest winners of globalization. To now dismantle that system is short-sighted and dangerous,” he said.

The CDU and SPD, currently negotiating the formation of a new coalition government, are already feeling the domestic consequences. As stock markets continue to fluctuate and manufacturing firms warn of layoffs, economic resilience is becoming a central issue in coalition talks. CDU leader Friedrich Merz has proposed immediate measures such as tax cuts, reduced bureaucracy, and lower energy prices to restore competitiveness.

Digital Tax Proposals and Strategic Repositioning

In addition to tariff retaliation, Germany is also considering long-term structural changes. Franziska Brantner, State Secretary at the Federal Ministry for Economic Affairs and a Green Party leader, has proposed a digital tax targeting US tech giants operating in Europe. Companies like Google, Amazon, and Netflix currently generate large profits in the EU with minimal tax contributions.

The imbalance in digital services trade—Europe imports significantly more from the US than it exports—provides an additional angle for countermeasures. However, experts warn that Europe’s dependence on US digital infrastructure limits its room for maneuver.

Still, there are calls to turn this crisis into an opportunity. Economists such as DIW President Marcel Fratzscher argue that the EU must reduce its reliance on the United States by investing in digital technologies, biotechnology, and aerospace within the bloc. Strengthening the internal market could help shield the EU from future economic coercion.

Uneven Treatment of Russia and Ukraine Fuels Criticism

One particularly controversial aspect of the US tariff policy is its selective application. While Ukraine faces new tariffs, Russia has been exempted. Trump administration officials explained that this decision was linked to ongoing peace talks over the war in Ukraine. Critics argue that such exemptions reveal inconsistencies in US foreign policy and undermine its credibility.

Despite sanctions limiting trade, Russia remains a more significant supplier to the US than Ukraine. In 2024, Russian goods worth $3 billion entered the US, compared to $1.2 billion from Ukraine. The continuation of trade in strategic goods from Russia has sparked further concerns among European allies.

Global Trade Order at Risk

Experts warn that Trump’s aggressive economic stance may have broader consequences for the global trade system. “The world economy is at risk of entering a new era of protectionism,” said economist Andreas Baur from the ifo Institute in Munich. He noted that history shows how quickly tariffs can escalate into global economic crises, referencing the events of the 1930s.

The US shift from “America First” to what critics now call “America Only” undermines the foundational principles of international trade, which are based on rules, fairness, and mutual benefit. Should other large economies adopt similar strategies, the existing world trade framework could unravel, leading to widespread instability.