Trump will ‘buckle under pressure’ if Europe bands together over tariffs, German economy minister says

U.S. President Donald Trump will “buckle under pressure” and alter his tariff policies if Europe bands together, acting German economy minister Robert Habeck said Thursday.

“That is what I see, that Donald Trump will buckle under pressure, that he corrects his announcements under pressure, but the logical consequence is that he then also needs to feel the pressure,” he said during a press conference, according to a CNBC translation.

“And this pressure now needs to be unfolded, from Germany, from Europe in the alliance with other countries, and then we will see who is the stronger one in this arm wrestle,” Habeck said.

Allowing Trump to persist or trying to appease him would not be a successful strategy under any circumstances, he added, noting that the response should be a “day of determination.”

Strategically, the aim should be to avoid tariffs and a trade war, but the question was how to get there, the economy minister said.

Habeck also urged Europe to make strategic investments to become more independent — for example by improving its cloud infrastructure and expanding its artificial intelligence and space capabilities.

“We just can’t rely on everyone only being friendly to us anymore,” he said, pointing to having learned a lesson the hard way when Germany’s economy was hit badly due to its dependence on Russian energy after the Russia-Ukraine war started.

Germany paid a “high price for this blindness, for this economic and energy policy blindness” and that should now not repeat itself in “all other areas,” Habeck said, suggesting that this was a task for the incoming government.

On Wednesday, Trump imposed 20% levies on the European Union, including on the bloc’s foremost economy Germany, as he signed a sweeping and aggressive “reciprocal tariff” policy.

Germany is widely regarded as one of the countries likely to be most impacted by Trump’s tariffs, given its heavy economic reliance on trade.

The U.S. is Germany’s most important trade partner ahead of China, with trade turnover — the sum of exports and imports — amounting to 252.8 billion euros ($278.7 billion) in 2024, according to German statistics office Destatis. Last year the U.S. was also the recipient of the biggest proportion of German exports.

The German index DAX was last down around 1.6% by 10:42 a.m. London time, while German government bonds were sharply lower. The yield on the 10-year Bund was last down by over 7 basis points to 2.648%, while the 2-year Bund yield tumbled more than 11 basis points to 1.93%.