German Chancellor Merz Warns EU-US Tariff Deal Will Harm German Economy, Europe, Trade

The newly agreed EU-US trade deal, which imposes a 15% tariff on most EU exports including cars, semiconductors, and pharmaceuticals, has sparked strong criticism from German and French leaders and industry groups. German Chancellor Friedrich Merz warned that the tariffs will severely damage Germany's export-driven economy, increase inflation, and disrupt transatlantic trade, although he acknowledged it was the best possible outcome under the circumstances. German industry associations, including the BDI and VDMA, criticized the deal as a painful compromise that will cost German businesses billions, particularly in the automotive sector, where tariffs remain significantly higher than previous levels. France's Prime Minister François Bayrou described the agreement as a "dark day," with concerns that it undermines the EU’s economic interests. Despite relief that a full trade war was averted, European stock markets reacted negatively due to uncertainty about the deal's long-term effects. While the deal reduces the threat of a 30% tariff previously threatened by President Trump, it still represents a substantial increase, with ongoing negotiations needed for steel, aviation, and pharmaceuticals tariffs.