Taxes, NATO, and Ukraine on the Agenda of Critical Trump-Merz Meeting in Washington

A countdown of three days begins today for the meeting between the President of the USA and the German Chancellor (the leader of the EU’s top economy) in Washington. Trump will allow the German Finance Minister to stay at the Blair House, next to the White House, which is considered a special honor according to the German press. Since taking office in January 2025, many world leaders have visited, including French President Emmanuel Macron, UK Prime Minister Keir Starmer, and Italian Prime Minister Giorgia Meloni. The main topics expected to dominate the discussion between Trump and Merz are taxes, NATO, and Ukraine. Specifically: 1. Ukraine: With new talks anticipated in Istanbul, ending the war in Ukraine remains a top priority. Merz has taken a leading role among Europeans but expressed disappointment over the lack of progress. In Washington, the German Chancellor is expected to pressure Trump to increase pressure on Russian President Vladimir Putin for a ceasefire. A new sanctions package is being prepared by Europeans, knowing that only cooperation with the U.S. can truly impress Putin. Trump stated last Wednesday (May 28, 2025) that within the next two weeks, it will be clear if Putin ‘leads us’ or not. His hesitation to impose new sanctions against Russia lies in his belief that he may be close to an agreement. 2. NATO: Merz supports increasing defense spending to 5%, though he stands alone in the EU. Ahead of the June summit, NATO leaders will meet in Brussels to discuss defense budgets. Trump demands 5% GDP from allies, while NATO Secretary-General Mark Rutte proposed a compromise formula of 3.5% for the army and 1.5% for infrastructure. Merz publicly supports this proposal, having already passed a constitutional budget for unlimited defense spending along with a €500 billion investment fund. However, other European leaders remain hesitant due to high national debts. Greek Prime Minister Kyriakos Mitsotakis also finds this goal challenging. 3. Taxes: A one-month suspension of U.S. 50% tariffs on the EU expires soon. The leaders’ meeting occurs shortly after Trump’s threat of 50% tariffs against the EU starting June 1, 2025, later postponed until July 9, 2025. Meanwhile, since April 9, 2025, 10% tariffs apply to all EU imports except coal and steel, taxed at 25%. The EU hasn’t retaliated yet but has drafted a list of American products for potential tariffs and considers digital transaction taxes. Trade negotiations between the U.S. and EU haven’t seen significant progress.