Germany urges EU to deploy 'anti-coercion' tool against US tariffs
What's the story
Germany has called on the European Union (EU) to consider deploying its strongest weapon, the "anti-coercion instrument," against US President Donald Trump's tariffs.
German Economy Minister Robert Habeck said today that these measures go beyond tariff policy and could even include targeting Big Tech companies.
The anti-coercion instrument was created as a deterrent and negotiation tool against coercive economic practices by major trade partners such as China or the US.
Response strategies
France suggests regulating data use by US tech giants
France has already hinted at one possible response to US tariffs: regulating data use by big American tech companies.
Austrian Trade Minister Wolfgang Hattmannsdorfer backed this approach, saying while negotiations are a priority, taxes on tech companies could be an option if talks fail.
Spain's Carlos Cuerpo also hinted at such action but stressed on careful consideration and negotiation first.
Trade tensions
EU ministers emphasize importance of negotiations with US
EU ministers are working to unify their stance on how to counter Trump's escalating tariff war, which has already affected global markets.
Poland's Michal Baranowski stressed the need for urgent talks with the US, noting that there shall be no winners in this confrontation.
He criticized the current approach as "shoot first, talk later" and called for serious negotiations with the US soon, given its significant economic relationship with Europe.
Unclear objectives
EU trade chief highlights uncertainty in US demands
The EU is weighing concessions even as it readies retaliatory measures to bolster its hand in negotiations with the US. The bloc wants to be prepared to respond if talks collapse.
EU trade chief Maros Sefcovic said the Trump administration is unclear about its demands, complicating Europe's response.
Some European officials dread a tit-for-tat trade conflict may be inevitable and see activating the anti-coercion tool as premature at this stage.
Economic consequences
German economists warn of potential economic impact
German economists have warned the reciprocal tariffs imposed by the Trump administration could trigger a recession in Germany and reduce national output by around 0.5%.
Carsten Brzeski, an economist at ING Germany, said "the 1930s are back," referring to the trade barriers of pre-World War II times.
Achim Wambach, President of the Centre for European Economic Research, warned severe economic consequences for both Americans and Europeans.