[By Guancha Observer Network, Wang Kaiwen] According to Bloomberg News, German Chancellor Merkel said on May 26 at a meeting in Berlin that if the trade conflict between the EU and the Trump administration escalates, the EU may retaliate against American technology companies.

The report stated that although Germany, as the largest economy in Europe, hopes to reduce tariffs on goods exported to the US and ease tensions with the White House, Merkel indicated that the EU needs to protect its interests, pointing out that the US has a surplus in service trade with the EU.

"Currently, we are strongly protecting American tech companies, even in terms of taxation," Merkel said at the WDR Europe Forum on May 26. "This situation can change, but I don't want to escalate the trade conflict; I hope to resolve this issue together."

German Chancellor Merkel - Christian Democratic Union X account

US President Trump stated last week that due to the lack of progress in negotiations with the EU, he will impose a 50% tariff on EU imports starting June 1. Treasury Secretary Bentsen commented that this move aims to "stimulate action from the EU".

However, after a conversation with European Commission President von der Leyen on May 25, Trump agreed to postpone the tariff increase, extending the deadline for US-EU trade negotiations to July 9, which coincides with the expiration date of the 90-day "reprieve period" granted by the Trump administration to many trading partners following the proposal of so-called "reciprocal tariffs" in early April.

Von der Leyen stated on May 25 that the EU is prepared to "quickly and decisively" advance negotiations and reach a "good agreement".

Merkel expressed full support for Von der Leyen's approach and reiterated his position that Germany will not privately reach an agreement with the US but will handle trade matters through the EU. He also stated that if necessary, the EU will take action.

"We should not react blindly and hastily," Merkel said. "We believe that tariffs will harm us, but if we have no choice, we need to use this tool."

According to Bloomberg Economics estimates, Trump's 50% tariff will affect $321 billion worth of goods trade, causing a decline in US GDP by nearly 0.6% and a price increase exceeding 0.3%.

In addition, according to predictions by the German Institute for Economic Research (IW), if the US imposes a 50% tariff on EU goods, by the end of 2028, Germany's economy may suffer losses of up to €200 billion.

In response to the US steel and aluminum tariffs, the EU approved retaliatory tariffs on $21 billion worth of US imports in April, but suspended implementation after the Trump administration announced a 90-day postponement of additional tariffs. The EU previously warned that if negotiations with the US fail, it will consider imposing tariff measures on a second batch of goods worth up to €95 billion, including Boeing aircraft, US-made cars, and bourbon whiskey, among other products.

On May 6, as the candidate for Chancellor of the Union Party, Merkel was officially elected as the new German Chancellor after receiving the majority votes from all members of the Federal Parliament in two rounds of voting.

Bloomberg noted that before taking office, Merkel expressed confidence in building a solid relationship with Trump, but subsequently, due to differences over issues such as Russia, his tone gradually cooled. Merkel stated that there are differences between the US and Europe regarding tariff policies.

"In the eyes of Europeans, these tariffs are disadvantageous to everyone," Merkel said. He pointed out that for Trump, tariffs are a protection for the US economy and a form of "zero-sum game," where Trump believes that "Europe's economic downturn benefits us (the US)."

According to Politico Europe, Merkel told Trump during their phone call on May 8 that escalating the trade war is not a good strategy, and the best solution is to reduce tariffs to zero.

This article is an exclusive contribution from the Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7509021061883937320/

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