BERLIN, Jan 18 (Reuters) – German industry reacted angrily on Sunday to US President Donald Trump’s planned use of tariffs to increase pressure on Denmark to sell Greenland, urging Europe not to give in to his demands.
Trump’s threat to implement a wave of escalating tariffs on European allies until the United States is allowed to buy the strategically important island derails a period of relative calm for businesses after Brussels and Washington reached a trade deal last summer.
Germany is vulnerable to tariffs because of its export-oriented economy, which is slowly emerging from two years of decline as global trade tensions weigh on demand for its products such as cars, machinery and chemicals.
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“If the EU gives in here, it will only encourage the US president to make the next absurd demand and threaten more tariffs,” said Bertram Kawlath, president of the German engineering association VDMA.
‘Highly controversial political objectives are being linked to economic sanctions in an unacceptable way,’ said Volker Treier, foreign trade expert at the German Chamber of Commerce and Industry (DIHK).
Both called for a unified response from the European Union, joining a similar statement from the head of Germany’s VDA automotive association on Saturday.
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This could include the EU’s ‘Anti-Coercion Instrument’, never used before, which allows the bloc to retaliate against countries that exert economic pressure on EU members to change their policies.
Saturday’s threat could derail interim agreements that Trump reached last year with the European Union and the United Kingdom, which is also the target of planned tariffs on Greenland.
The VDMA and DIHK have cast doubt on the likelihood of EU parliamentarians voting on the deal with Washington this month, particularly involving the removal of many EU tariffs on US goods imported into the bloc.
“The European Parliament cannot decide on tariff cuts for the US next week while Washington is pressuring the European Union with new punitive tariffs,” Kawlath said.
