German Chancellor Merz told his annual summer press conference in Berlin on July 15 that government reforms are taking longer than expected and that U.S. tariff policy, in addition to domestic factors, has hit early recovery momentum and severely weakened recovery prospects. He said the decision to take on substantial additional borrowing was prompted by changes in the diplomatic and security environment—notably the situation in Ukraine and actions by some partners toward Ukraine—which forced a

German Chancellor Merz told his annual summer press conference in Berlin on July 15 that government reforms are taking longer than expected and that U.S. tariff policy, in addition to domestic factors, has hit early recovery momentum and severely weakened recovery prospects. He said the decision to take on substantial additional borrowing was prompted by changes in the diplomatic and security environment—notably the situation in Ukraine and actions by some partners toward Ukraine—which forced a recalibration of fiscal policy. Merz did not name countries or leaders; his remarks have been widely interpreted as referring to U.S. President Trump.