Germany races to reform taxes as US tariffs threaten key industries

A warning from MIT’s chair: without swift tax relief, Germany’s backbone—small and medium firms—could buckle under US trade pressure. Will Berlin act in time?

, and Administrator

2026 January 18 . 5:04 PM

1 min read

The image shows an open book with a map of Germany on it. The map is detailed and shows the various... — The image shows an open book with a map of Germany on it. The map is detailed and shows the various provinces and cities of the country. The text on the book provides additional information about the map.

Germany races to reform taxes as US tariffs threaten key industries

Germany’s export-focused economy faces fresh challenges after US tariff threats. MIT chair Gitta Connemann has called for urgent tax reforms to protect small and medium-sized businesses. She warns that these firms will feel the strain most sharply.

Connemann’s demands follow US President Donald Trump’s latest tariff plans. She argues that the new rules force Germany to put ‘economy first’ to stay competitive. Immediate action is needed, she insists.

The MIT leader wants the solidarity surcharge scrapped and corporate taxes overhauled. She also pushes for lower electricity taxes for all companies and households. These steps, she claims, would ease pressure on businesses and safeguard jobs.

Implementation would fall to the Federal Ministry of Finance. Connemann frames the changes as essential for preserving German industry and value creation. Without them, she warns, businesses could struggle under rising costs.

The proposed tax cuts and reforms aim to shield Germany’s economy from US tariffs. Connemann’s plan focuses on reducing financial burdens for both companies and consumers. The next steps depend on government action and how quickly reforms can take effect.