German Discontent over EU–US 15% Tariff Agreement

The 15% tariff deal, announced at the end of July by Donald Trump and Ursula von der Leyen as a measure to prevent a broader trade conflict, has been described by German business leaders as a costly compromise that could weaken Europe’s—especially Germany’s—competitive standing in global markets.

Markus Kerber, CEO of German energy giant RWE, has openly questioned the effectiveness of the agreement. Referring to the energy commitments placed on the US under the deal, he stated: “The United States simply cannot produce this additional volume of energy.” His remarks have heightened doubts about the realism of the deal’s provisions and intensified concerns over Europe’s growing energy dependence. Kerber added that expecting increased supply when US energy production is already limited is not only impractical but also risky.

According to a survey conducted by the Association of German Chambers of Commerce and Industry (DIHK), nearly 60% of German companies believe the agreement will not facilitate trade but will instead impose additional economic pressure. Among companies with direct ties to the US market, this figure rises to 74%. Many of these firms fear the new tariffs will raise export costs and weaken their position against American and Asian competitors. Analysts warn that the deal’s consequences could ripple through Germany’s economy, affecting production, employment, and investment.

Lars Klingbeil, Germany’s Finance Minister and Vice Chancellor, while acknowledging the need for an agreement with the US, has warned that its consequences could severely hinder Germany’s economic growth. “We had to reach a deal to avoid trade tensions,” he said, “but the outcome of this compromise is nothing but a slowdown for the German economy.” His comments reflect growing divisions within European governments over the quality and benefits of the agreement.

In response to Klingbeil’s criticism, the European Commission expressed surprise and emphasized that Germany was fully informed of all negotiations and decisions. Olof Gill, the Commission’s trade spokesperson, stated: “No decision was made without the knowledge and involvement of member states—especially Germany, which was kept informed throughout the entire process.” Brussels’ reaction suggests that Germany’s criticism may be driven more by domestic political differences than by the content of the agreement itself.

Meanwhile, some members of the European Parliament, such as Sonja Hahn from Germany’s FDP party, argue the deal lacks clear benefits for the EU and undermines the principles of rules-based trade. Critics claim that the EU has made concessions without securing tangible gains, warning that this could set a precedent for further one-sided compromises in the future.

Although the EU’s retaliatory tariffs against the US have been temporarily suspended, negotiations are ongoing and many key issues remain unresolved. The EU has announced that its planned tariffs on American goods—worth €93 billion—have been postponed for six months to allow room for a more sustainable agreement. At the same time, German Chancellor Friedrich Merz emphasized that the EU is seeking a specific agreement on steel export quotas to avoid steep tariffs. He acknowledged the current deal as a “difficult compromise” but warned that escalating trade tensions would be damaging to Europe. The next step, he said, is to define precise and flexible conditions in sensitive sectors like steel and related industries.

Sources: Handelsblatt, Reuters, FT, DW