The European Union must take “decisive” measures against the U.S. if tariff negotiations fail to cool an escalating global trade war, German Finance Minister Lars Klingbeil said on Sunday.

U.S. President Donald Trump on Saturday threatened to impose a 30% tariff on imports from Mexico and the EU starting on Aug. 1, after weeks of negotiations with the major U.S. trading partners failed to reach a comprehensive trade deal.

The threat has prompted a robust response from German politicians and business leaders.

“If a fair negotiated solution does not succeed, then we must take decisive countermeasures to protect jobs and companies in Europe,” Klingbeil, who is also vice chancellor in Germany’s ruling coalition, told German newspaper Sueddeutsche Zeitung.

“Our hand remains outstretched, but we will not go along with everything,” he added.

Germany, Europe’s biggest economy, is a big exporter to the U.S., where it sells vehicles and automotive components, machinery and pharmaceuticals.

In 2024, it sold goods worth 161 billion euros ($188 billion) to the U.S., running a trade surplus of nearly 70 billion euros, according to German government data.

Klingbeil said Trump’s tariffs policy would only result in losers, and called for deescalation in the row, which he said threatened the American economy at least as much as European companies.

“Nobody needs new threats or provocations now,” Klingbeil said.

“Instead, we need the EU to continue serious and targeted negotiations with the USA. Europe remains united and determined: We want a fair deal.”

Earlier on Sunday, Juergen Harder, deputy leader of Chancellor Friedrich Merz’s conservative CDU/CSU parliamentary group in the Bundestag, said he was hopeful of further negotiations between the EU and Washington, with the higher tariffs postponed.

“I’m betting that at least a partial agreement and a further postponement will be reached before August 1,” Hardt told Reuters.

“After all, high tariffs have to be paid by American citizens and companies and lead to higher prices and inflation in the U.S.,” he said.

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EU chief Ursula von der Leyen and Indonesian President Prabowo Subianto announced on Sunday they reached a “political agreement” to conclude a long-awaited free trade deal, as U.S. leader Donald Trump upends global commerce.

“We’re living in turbulent times and when economic uncertainty meets geopolitical volatility, partners like us must come closer together. So today we’re taking a big step forward in this partnership,” von der Leyen told journalists in Brussels.

“I am very pleased to report that we have just reached a political agreement on an ambitious free trade agreement.”

The 27-nation European bloc and Southeast Asia’s largest economy have been negotiating since 2016 to agree on a deal that is expected to increase trade and investment.

A European Commission statement called Sunday’s agreement a “decisive milestone” toward striking the deal, which is to be concluded in September by EU trade chief Maros Sefcovic and Indonesia’s chief economic minister, Airlangga Hartarto.

“There’s a lot of untapped potential in our trade relationship. And therefore this agreement comes at the right time, because the new agreement will open new markets,” von der Leyen said.

“It will create more opportunities in key industries, in business activity and agriculture, in automotive and in services.”

Brussels has stepped up efforts to improve ties with key potential partners around the world as Trump threatens a trade war with sweeping tariffs.

“This big and important political agreement on the free trade agreement with Indonesia is today a huge milestone forward and shows that we’re looking for new markets, open markets,” von der Leyen said.

Prabowo called the announcement in Brussels a “breakthrough.”

“After 10 years of negotiations, we have concluded the agreement to have a Comprehensive Economic Partnership Agreement, which basically is a free trade agreement,” he said.

The president said, “We consider Europe still a very important factor, and we would like to see a very strong Europe.”

But he insisted, “The United States will always be a very important leader in the world.”

The European Union is Indonesia’s fifth-largest trading partner, with bilateral trade between them reaching $30.1 billion last year.

Ties had been frayed by a proposed EU import ban on products linked to deforestation that has angered Indonesia because it is a major palm oil exporter.

That legislation has been delayed until the end of this year.

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Türkiye’s road freight to Syria surged 60% in the first five months of 2025 compared to the same period last year, driven by improving conditions in the country and renewed efforts to reopen transit corridors to the Gulf, according to the head of a Turkish international transport association.

Şerafettin Aras, chairperson of the board at the International Transporters Association (UND), said Türkiye made nearly 113,000 road shipments to Syria between January and May 2025, up from around 70,000 in the same period of 2024.

“In the coming period, the number of trips from Türkiye to Syria will increase further,” Aras told Anadolu Agency (AA) on Saturday. “I believe that the 50,000 transit numbers to Syria, before 2011, will increase three, four or fivefold.”

He said Syria and Iraq remain vital to Türkiye’s trade routes and noted progress following last month’s Global Transportation Corridors Forum in Istanbul, which brought together ministers, deputy ministers and senior officials from nearly 40 countries.

“Our President Recep Tayyip Erdoğan also attended the opening ceremony. The importance of Türkiye’s position as a corridor country was once again underlined,” he said.

Transit revival

Aras recalled that following the outbreak of conflict in Syria in 2011, goods were often returned at the Cilvegözü Border Gate. Transit activity to Syria fell to a standstill, and bilateral trade with Iraq and Syria slowed sharply. “Previously, we had to transport goods through northern Iraq and transfer them into Syria from there,” he said.

Despite a 3% year-over-year decrease in overall bilateral transport to Iraq and Syria, Aras said the transit model is now gaining ground again. A memorandum of understanding (MoU) on transit transport with Syria was signed during the Istanbul forum.

He said one of Türkiye’s transit trucks recently departed from Izmir and delivered goods to a port in Iraq for onward shipment to Gulf countries, marking the country’s entry into Iraq’s Truck Permit System. Three other trucks were loaded in Konya and routed through Iraq to Jordan and Kuwait.

“This increase in transit transport will bring serious benefits to the sector and boost foreign exchange inflows to our country,” he said.

Strategic value of land routes grows

Aras pointed to current instability in maritime routes due to the Israel-Palestine conflict, saying land transport through Syria and Iraq will become increasingly crucial for shipments to the Gulf.

He said Türkiye will not only be able to transport European goods through this corridor but also expand its own exports to countries such as the United Arab Emirates (UAE) and Saudi Arabia.

“Given our country’s location, as our president said at the Global Transportation Corridors Forum, we are a corridor country, Aras said. “If we resolve the regional issues around us, transit transportation will generate more foreign currency for this country than tourism.”

Last year, the Turkish transport sector completed around 493,000 trips to Iraq and 190,000 to Syria. Aras said he expects these trips to rise significantly in 2025 as security improves and agreements begin to take effect.

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Türkiye’s Investment Environment Improvement Council (YOIKK) has recently released its 2025 Action Plan, outlining legal and structural reforms to improve the country’s investment climate, with a strong focus on several areas, including industrial transformation, green energy, digital economy and regional competitiveness.

The plan includes 39 actions aimed at supporting private sector investments, streamlining bureaucratic procedures, and aligning Türkiye’s business environment with global standards. Key priorities include boosting industrial output, supporting tech entrepreneurship, and increasing predictability in investment-related legislation.

The Industry and Technology Ministry will oversee new organized industrial zones, with expansion aligned with a national industrial master plan. The Energy and Natural Resources Ministry will focus on energy-intensive industrial zones to support sustainable production.

Updated strategy roadmaps will be released for priority industrial sectors, aligned with Türkiye’s 2030 Industry and Technology Strategy.

The action plan includes the creation of a single-window investment platform to simplify transactions, and new regulations to increase predictability in qualified investments, compensate for risk, and expedite legal procedures related to investment disputes.

Enterprise and small and medium-sized enterprises (SME) classification thresholds will be revised based on economic conditions.

The plan also aims to strengthen vocational training through the expansion of higher education institutions in organized industrial zones. These institutions will be developed in coordination with local chambers of commerce to meet labor market demands and improve university-industry cooperation.

Hydrogen action plan

The Industry and Technology Ministry will soon publish a national hydrogen strategy to guide legislation, regulation, and infrastructure for hydrogen production, safety, and implementation.

The plan will kick-start a green hydrogen ecosystem by supporting research in electrolyzers and fuel cells. Infrastructure development will be incentivized, and alignment with EU environmental regulations on chemicals, waste and emissions will be ensured.

New AI strategy plan

Existing legislation on data nationalization will be reviewed under a forthcoming National Cloud Computing Strategy and a new National Data Strategy.

A separate 2026-2030 Artificial Intelligence Action Plan will also be released to boost Türkiye’s global AI competitiveness. The plan will include policies for ethical AI development.

Local development initiative

The new Local Development Initiative Program will define regional priorities across Türkiye and promote sector-specific activities to unlock unused potential and strengthen regional production capabilities.

A nationwide call for investment proposals under this initiative is expected later this year.

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U.S. President Donald Trump said on Saturday the tariffs of 30% against the European Union and Mexico would be in force starting Aug. 1, a move that could cause massive upheaval between Washington and two of its biggest trade partners.

Trump detailed the planned tariffs in letters posted to his social media account. They are part of an announcement blitz by Trump of new tariffs aimed at allies and foes alike, a bedrock of his 2024 campaign that he said would set the foundation for reviving a U.S. economy that he claims has been ripped off by other nations for decades.

In his letter to Mexico’s president, Claudia Sheinbaum, Trump acknowledged that the country has been helpful in stemming the flow of undocumented migrants and fentanyl into the U.S. But he said the country has not done enough to stop North America from turning into a “Narco-Trafficking Playground.”

“Mexico has been helping me secure the border, BUT, what Mexico has done, is not enough,” Trump added.

On the other hand, Trump, in his letter to the EU, said the U.S. trade deficit was a national security threat.

“We have had years to discuss our Trading Relationship with The European Union, and we have concluded we must move away from these long-term, large, and persistent, Trade Deficits, engendered by your Tariff, and Non-Tariff, Policies, and Trade Barriers,” Trump wrote in the letter to the EU. “Our relationship has been, unfortunately, far from Reciprocal.”

Continuation of April blitz

The letters come in the midst of an on-and-off Trump threat to impose tariffs on countries and right an imbalance in trade. Trump in April imposed tariffs on dozens of countries, before pausing them for 90 days to negotiate individual deals. As the three-month grace period ended this week, Trump began sending his tariff letters to leaders, but again has pushed back the implementation day for what he says will be just a few more weeks.

If he moves forward with the tariffs, it could have ramifications for nearly every aspect of the global economy.

European Union Commission President Ursula von der Leyen responded by noting the bloc’s “commitment to dialogue, stability, and a constructive transatlantic partnership.”

“At the same time, we will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required,” von der Leyen said in a statement.

Von der Leyen added that the EU remains committed to continuing negotiations with the U.S. and coming to an agreement before Aug. 1. Trade ministers from EU countries are scheduled to meet Monday to discuss trade relations with the U.S., as well as with China.

European leaders joined von der Leyen in urging Trump to give negotiations more time and warnings of possible new tariffs on Washington.

“With European unity, it is more than ever up to the Commission to assert the Union’s determination to resolutely defend European interests,” French President Emmanuel Macron said in a statement posted on X.

Italian Premier Giorgia Meloni’s office said “it would make no sense to trigger a trade war between the two sides of the Atlantic.”

Danish Foreign Minister Lars Lokke Rasmussen told broadcaster DR that Trump was taking a “pointless and a very shortsighted approach.” Swedish Prime Minister Ulf Kristersson warned in an interview with SVT that “everyone loses out from an escalated trade conflict, and it will be U.S. consumers who pay the highest price.”

Trump, as he has in previous letters, warned that his administration would further raise tariffs if the EU attempts to hike its own tariffs on the U.S.

‘Unfair treatment’

The Mexican government said it was informed during high-level talks with U.S. State Department officials Friday that the Trump letter was coming. The delegation told Trump officials at the meeting it disagreed with the decision and considered it “unfair treatment,” according to a Mexican government statement.

Sheinbaum, who has sought to avoid directly criticizing Trump in the early going of her presidency, expressed a measure of confidence during a public appearance on Saturday that the U.S. and Mexico will reach “better terms.”

“I’ve always said that in these cases, you need a cool head to face any problem,” Sheinbaum said.

With the reciprocal tariffs, Trump is effectively blowing up the rules governing world trade. For decades, the U.S. and most other countries abided by tariff rates set through a series of complex negotiations known as the Uruguay round. Countries could set their own tariffs, but under the “most favored nation’’ approach, they couldn’t charge one country more than they charged another.

The Mexico tariff, if it goes into effect, could replace the 25% tariffs on Mexican goods that do not comply with the existing U.S.-Mexico-Canada free trade agreement.

Trump’s letter did not address if USMCA-compliant goods would still be exempt from the Mexico tariffs after Aug. 1, as the White House said would be the case with Canada. Trump sent a letter to Canada earlier this week threatening a 35% tariff hike.

With Saturday’s letters, Trump has now issued tariff conditions on 24 countries and the 27-member European Union.

So far, the tally of trade deals struck by Trump stands at two, one with the U.K. and one with Vietnam. Trump has also announced the framework for a deal with China, the details of which remain fuzzy.

Treasury Secretary Scott Bessent on Saturday said the U.K. “smartly” acted early.

“Let this be a lesson to other countries – earnest, good faith negotiations can produce powerful results that benefit both sides of the table, while correcting the imbalances that plague global trade,” Bessent said in a posting on X.

Douglas Holtz-Eakin, a former Congressional Budget Office director and president of the center-right American Action Forum, said the letters were evidence that serious trade talks were not taking place over the past three months. He stressed that nations were instead talking amongst themselves about how to minimize their own exposure to the U.S. economy and Trump.

“They’re spending time talking to each other about what the future is going to look like, and we’re left out,” Holtz-Eakin said.

If the tariffs do indeed take effect, the potential impact on Europe could be vast.

The value of EU-U.S. trade in goods and services amounted to 1.7 trillion euros ($2 trillion) in 2024, or an average of 4.6 billion euros a day, according to the EU statistics agency Eurostat.

Europe’s biggest exports to the U.S. were pharmaceuticals, cars, aircraft, chemicals, medical instruments and wine and spirits.

Lamberto Frescobaldi, president of the Union of Italian Wines trade association, said Trump’s move could lead to “a virtual embargo” of his country’s wine.

“A single letter was enough to write the darkest chapter in relations between two historic Western allies,” Frescobaldi said.

Trump has complained about the EU’s 198 billion-euro trade surplus in goods, which shows Americans buy more goods from European businesses than the other way around.

However, American companies fill some of the gap by outselling the EU when it comes to services such as cloud computing, travel bookings, and legal and financial services.

The U.S. services surplus took the nation’s trade deficit with the EU down to 50 billion euros ($59 billion), which represents less than 3% of overall U.S.-EU trade.

A top business delegation from Türkiye met with Syrian President Ahmad al-Sharaa in Damascus on Friday to discuss opportunities for economic cooperation and the reconstruction of the war-torn country’s industrial and commercial infrastructure.

Türkiye has supported opposition forces in Syria throughout the 13-year civil war that ended in December with the ousting of longtime dictator Bashar Assad. It is now positioning itself to play a major role in the neighboring country’s rebuilding.

Turkish companies now see big opportunities after a lifting of long-standing U.S. sanctions, which severed Syria from the global financial system, cleared the way for investment in postwar reconstruction.

The delegation from the Union of Chambers and Commodity Exchanges of Türkiye (TOBB) arrived in Damascus on Thursday and attended a meeting with top officials, including Minister of Economy and Industry Nidal al-Shaar and the representatives of the Syrian business world.

On Friday, the delegation was received by al-Sharaa for a meeting that TOBB President Rifat Hisarcıklıoğlu described as “highly productive,” emphasizing Türkiye’s commitment to the principles of good neighborly relations.

“We discussed areas of potential commercial collaboration. Syrian authorities expressed strong interest in partnering with Turkish companies. I believe we will see a rapid advancement in bilateral trade and economic relations,” Hisarcıklıoğlu said in a statement.

Ankara has pledged to help rebuild Syria’s economy, including by providing natural gas. And Ziraat, Türkiye’s top state bank, has said it would step in to support its banking sector when conditions are right.

Syria’s economic recovery

The delegation engaged in a series of bilateral meetings with Syrian counterparts, focusing on restoring the country’s industrial and commercial infrastructure, he noted. “We are closely following Syria’s normalization process and fully support its territorial integrity and efforts to rebuild national unity,” Hisarcıklıoğlu stated.

Construction, transportation and manufacturing firms from Türkiye are poised to play a major role in repairing the damage, which the U.N. estimates at nearly $1 trillion.

Hisarcıklıoğlu said that TOBB is ready to contribute to providing support to ensure the success of efforts toward economic development and help Syria’s economic recovery.

“We discussed how we can contribute to Syria’s reconstruction, how we can revitalize the private sector and entrepreneurship, and how we can enhance the trade volume between the two countries,” Hisarcıklıoğlu said.

“Turkish companies can play a significant role in many sectors, especially infrastructure, construction, energy, food, and logistics.”

Energy

The meeting with al-Sharaa came a day after Energy and Natural Resources Minister Alparslan Bayraktar said Türkiye would provide 2 billion cubic meters of natural gas to Syria each year.

Gas exports to Syria will contribute to an additional 1,300 megawatts of electricity production in the country, Bayraktar told a joint news conference with his Syrian counterpart Mohammed al-Bashir in Damascus.

Türkiye will also provide an additional 1,000 megawatts of electricity to Syria for its short-term needs, he added.

Al-Bashir said they agreed to activate a gas pipeline that connects Syria with Türkiye, with gas flows expected in June.

The two ministers discussed completing a 400-kilovolt line that links the countries, contributing to importing around 500 megawatts of electricity into Syria, to be ready by the end of the year or shortly thereafter, he added.

Cooperation also includes opening the door for Turkish companies to invest in mining, phosphate, electricity generation and electricity distribution in Syria.

OIZ, border expertise

Hisarcıklıoğlu emphasized that the Turkish business community can share its expertise, particularly in organized industrial zones (OIZs) and the modernization of land border gates, and that joint efforts can be undertaken in these areas.

“We have tremendous experience in OIZs. Since the 1990s, OIZs have spread across Anatolia, accelerating the industrialization process. Today, there are more than 400 OIZs throughout Türkiye. Companies located in these zones account for 45% of total industrial production and provide employment to approximately 2.7 million people. Thanks to this OIZ model, Türkiye has become an industrial country,” he explained.

Hisarcıklıoğlu added that land border gates in Türkiye were modernized by the chamber and the commodity exchange community and that the project was selected by the United Nations as the best worldwide and presented as a model.

“Our land border gates, which now operate more efficiently and effectively, have seen a sharp increase in traffic volume, while freight costs for our exporting companies have decreased. We want to bring all these experiences to Syria. Technical work is needed for this. In bilateral meetings, we conveyed the need to establish a working group on this matter,” he said.

Trade

Hisarcıklıoğlu emphasized that transportation activities between Türkiye and Syria have recently gained momentum, and trade in the region has been revitalized.

In the first five months of 2025, 110,000 shipments were made from Türkiye to Syria, marking a 60% increase compared to the same period last year, he noted.

“There are over 30,000 companies established by Syrians in Türkiye, 6,000 of which operate in the manufacturing sector,” Hisarcıklıoğlu said.

He noted that bilateral trade between Türkiye and Syria had dropped from $2.5 billion to $486 million during the civil war. But it has rebounded to $2.5 billion, despite the challenges of war, thanks to the contributions of Syrian-founded businesses in Türkiye, he added.

As of 2024, Türkiye became Syria’s largest trading partner, with Syrian entrepreneurs playing a major role in this development, according to Hisarcıklıoğlu.

“This creates a significant advantage for deeper cooperation between Türkiye and Syria in the new period,” he added.