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Berlin weighs digital tax in response to Trump tariff threats

BERLIN — German politicians are cautiously reopening the debate over a digital tax on U.S. tech companies as President Donald Trump renews his tariff threats.

That shift is driven less by the chancellery than by growing pressure inside Chancellor Friedrich Merz’s governing coalition and his conservative bloc.

Berlin is not rushing any formal proposals for how the EU should respond after Trump on Saturday threatened tariffs on eight countries including Germany over Greenland.

Government talks have focused on restraint, with officials emphasizing the need to stay calm and avoid emotional reactions. At a press conference Monday, a government spokesperson said Merz was “a rational person who does not put a stamp on international relations.” Merz, who leads the Christian Democratic Union (CDU), has argued for a measured response.

Yet Vice Chancellor Lars Klingbeil, a Social Democrat, has left the door open to tougher options. “We should now examine the use of these measures,” he said, referring to the EU’s trade defense toolbox, including the Anti-Coercion Instrument — the bloc’s untested trade bazooka — that could be used to target services such as tech.

While Merz remains reserved, senior lawmakers from within his Christian Democrat camp are openly advocating retaliation aimed at U.S. tech firms.

Sepp Müller, the deputy parliamentary leader of the CSU and its Bavarian sister party, called on Monday for a digital tax and even import bans on U.S. products.

“The issue will certainly come onto the table,” Ralph Brinkhaus, the conservative group’s digital policy spokesperson, told POLITICO — while stressing that any move should be “reflected and thought through.”

Klingbeil’s Social Democrats appear willing to revisit earlier commitments. SPD digital policy lawmaker Johannes Schätzl told POLITICO that previous agreements — in which the EU committed not to introduce a digital infrastructure levy — now need to be reassessed.

Draft proposals for a German digital tax, prepared by Culture Minister Wolfram Weimer, have been sitting in the Finance Ministry since December, according to people familiar with the process.

Klingbeil’s ministry has previously weighed whether such a move would unnecessarily antagonize Washington, and declined to say whether that assessment has now changed.

For now, the government’s official position remains cautious, even as the renewed tariff threat reopens a debate Berlin has long tried to keep on hold.

Digital Minister Karsten Wildberger, in comments to POLITICO, warned against public escalation. “It is important not to constantly make announcements, but first to enter into dialogue,” he said, referring to the idea of activating the Anti-Coercion Instrument.

Larissa Kögl contributed to this report.

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Writers at Lord’s Press come from a range of professional backgrounds, including history, diplomacy, heraldry, and public administration. Many publish anonymously or under initials—a practice that reflects the publication’s long-standing emphasis on discretion and editorial objectivity. While they bring expertise in European nobility, protocol, and archival research, their role is not to opine, but to document. Their focus remains on accuracy, historical integrity, and the preservation of events and individuals whose significance might otherwise go unrecorded.

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