German Chancellor Friedrich Merz said that Trump’s threat of 30% tariffs on goods from the European Union would hit the German export industry “to the core,” and vowed to work toward a solution.

Mexico and Europe are grappling with how to respond to a U.S. administration that is using trade policy for a range of political and economic objectives.

Economists had already downgraded growth for the European Union, and the new duties would hit industries there especially hard. Companies are looking for ways to blunt the impact.