Key points
- US tariffs represent extraordinary day for global economy: Minister
- Appeasing Trump would not be effective: Minister
- Habeck urges Europe to make strategic investments
ISLAMABAD: Germany’s economy minister, Robert Habeck, stated that the tariffs imposed by President Donald Trump represented an “extraordinary day for the global economy, akin to the situation following Russia’s aggression against Ukraine.”
US President Donald Trump will “yield to pressure” and revise his tariff policies if Europe unites, said acting German economy minister Robert Habeck, according to Newsweek.
“That’s how I see it – Donald Trump will yield to pressure and amend his decisions, but the logical outcome is that he, too, must feel the pressure,” he remarked during a press conference, according to CNBC.
“This pressure must now be applied, from Germany and from Europe in partnership with other nations, and then we will see who is stronger in this contest of wills,” Habeck continued.
He warned that permitting Trump to continue his approach or attempting to appease him would not be effective under any circumstances, emphasising that the response should be one of “determination.”
Avoiding trade war
The primary goal, he said, should be to avoid tariffs and a trade war, but the challenge lies in how to achieve this.
Habeck also urged Europe to make strategic investments to become more self-reliant, such as enhancing its cloud infrastructure and expanding its capabilities in artificial intelligence and space, according to CNBC.
“We can no longer rely on everyone always being friendly towards us,” he said, reflecting on the harsh lesson Germany learned when its economy was severely impacted by its dependence on Russian energy following the start of the Russia-Ukraine war.
Germany paid a “high price for this blindness, for this economic and energy policy blindness,” Habeck remarked, emphasising that this should not be repeated in “all other areas.” He suggested that this should be a priority for the incoming government.
Preparing Countermeasures
On Wednesday, President Trump imposed 20 per cent tariffs on the European Union, including on Germany, the bloc’s largest economy, as he enacted a sweeping and aggressive “reciprocal tariff” policy.
Germany is expected to be one of the hardest-hit nations by Trump’s tariffs, given its significant economic dependence on trade, according to BBC.
In response to the White House’s actions, European Commission President Ursula von der Leyen stated that the European Union was preparing countermeasures to address the latest tariffs from the US if negotiations fail, according to Reuters.
“We are prepared to respond,” she said. “We are now preparing further countermeasures to protect our interests and businesses if negotiations fail.”
However, von der Leyen also called for a shift “from confrontation to negotiation,” suggesting that it was not too late for talks between the EU and the US.
