BERLIN: German Chancellor Angela Merkel on Wednesday warned US President Donald Trump against unleashing an all-out trade war after he threatened to impose steep tariffs on cars from the European Union.
In a speech to the Bundestag federal parliament, Merkel said both sides were effectively locked in a “trade conflict” since Trump’s decision to slap punitive tariffs on steel and aluminum imports.
“It is worthwhile to prevent this conflict from becoming a real war,” she said, adding however that this “would require both sides” to take steps.
Trump on Sunday charged that Europe is “possibly as bad as China” on trade, as he reiterated that he is mulling import taxes of 20 percent on EU cars.
The EU has slapped tariffs on iconic US products including bourbon, jeans and Harley-Davidson motorcycles, as a symbolic tit-for-tat response to the metals duties.
Taking aim at Trump over his complaint that the EU, and in particular economic powerhouse Germany, is running a massive trade surplus against the US, Merkel said that his calculation is skewed as it is based only on goods, not services.
“If you include services like the digital services, then you have a completely different trade balance sheet, with the US showing a surplus against the EU,” she noted.
“It is almost old-fashioned to only calculate goods and not include services,” Merkel said.
Merkel has previously voiced backing for a “digital tax” that would target multinationals like Amazon, Facebook or Google, which have come under fire for shifting earnings around Europe in order to pay lower taxes.
But the EU is divided over the proposal, as countries including Luxembourg and Ireland are loath to see US tech giants head for the exit.
With the US-EU trade row showing few signs of easing, European Commission President Jean-Claude Juncker is heading to Washington by the end of July to seek a way out of the conflict.
Relations between the US and other industrialized powers have turned increasingly tense as Trump has pushed his “America First” stance with punishing consequences for trading partners, regardless of whether they are allies or adversaries.
Historically strong ties between Berlin and Washington have also taken a beating since the US leader repeatedly skewered Germany over its record trade surplus as well as its relatively small defense spending.
Merkel acknowledged that Berlin has not been investing enough on defense, but stressed that it will push outlays to 1.5 percent of gross domestic product by 2025.
Nevertheless, Berlin’s planned spending is still short of the NATO goal of 2 percent that Trump insists on.
And despite its 1.5 percent pledge, its latest budget forecast for the coming years shows the proportion actually falling to 1.23 percent in 2022 from 1.24 percent this year — something that could emerge as a point of contention when NATO leaders gather in Brussels next Wednesday and Thursday (July 11-12).
Merkel stressed however that “Germany is a reliable partner in NATO.”
“We are the second biggest provider of troops, we are participating in several missions and Germany will remain a reliable partner of NATO,” she said.
Merkel said “wars are raging on our front door,” listing the Syrian war, Daesh group militancy, unrest in Afghanistan and the conflict in Ukraine.
“To not be prepared for defense of the alliance would be negligent,” she said.
Merkel warns Trump against trade war over car tariffs threat
Merkel warns Trump against trade war over car tariffs threat
Jordan’s industry fuels 39% of Q2 GDP growth
JEDDAH: Jordan’s industrial sector emerged as a major contributor to economic performance in 2025, accounting for 39 percent of gross domestic product growth in the second quarter and 92 percent of national exports.
Manufactured exports increased 8.9 percent year on year during the first nine months of 2025, reaching 6.4 billion Jordanian dinars ($9 billion), driven by stronger external demand. The expansion aligns with the country’s Economic Modernization Vision, which aims to position the country as a regional hub for high-value industrial exports, the Jordan News Agency, known as Petra, quoted the Jordan Chamber of Industry President Fathi Jaghbir as saying.
Export growth was broad-based, with eight of 10 industrial subsectors posting gains. Food manufacturing, construction materials, packaging, and engineering industries led performance, supported by expanded market access across Europe, Arab countries, and Africa.
In 2025, Jordanian industrial products reached more than 144 export destinations, including emerging Asian and African markets such as Ethiopia, Djibouti, Thailand, the Philippines, and Pakistan. Arab countries accounted for 42 percent of industrial exports, with Saudi Arabia remaining the largest market at 955 million dinars.
Exports to Syria rose sharply to nearly 174 million dinars, while shipments to Iraq and Lebanon totaled approximately 745 million dinars. Demand from advanced markets also strengthened, with exports to India reaching 859 million dinars and Italy about 141 million dinars.
Industrial output also showed steady improvement. The industrial production index rose 1.47 percent during the first nine months of 2025, led by construction industries at 2.7 percent, packaging at 2.3 percent, and food and livestock-related industries at 1.7 percent.
Employment gains accompanied the sector’s expansion, with more than 6,000 net new manufacturing jobs created during the period, lifting total industrial employment to approximately 270,000 workers. Nearly half of the new jobs were generated in food manufacturing, reflecting export-driven growth.
Jaghbir said industrial exports remain among the economy’s highest value-added activities, noting that every dinar invested generates an estimated 2.17 dinars through employment, logistics, finance, and supply-chain linkages. The sector also plays a critical role in narrowing the trade deficit and supporting macroeconomic stability.
Investment activity accelerated across several subsectors in 2025, including food processing, chemicals, pharmaceuticals, mining, textiles, and leather, as manufacturers expanded capacity and upgraded production lines to meet rising demand.
Jaghbir attributed part of the sector’s momentum to government measures aimed at strengthening competitiveness and improving the business environment. Key steps included freezing reductions in customs duties for selected industries, maintaining exemptions for production inputs, reinstating tariffs on goods with local alternatives, and imposing a 16 percent customs duty on postal parcels to support domestic producers.
Additional incentives in industrial cities and broader structural reforms were also cited as improving the investment climate, reducing operational burdens, and balancing consumer needs with protection of local industries.
