The Chancellor’s administration is considering lobbying for coordinated action from the European Union, two German officials familiar with the discussions told Bloomberg. The global news website has seen an economy ministry paper which warned such measures from the US could hit significantly more German and European companies and banks as well as state agencies. EU member states have been deeply divided over the 1,200-kilometer (745 mile) Nord Stream 2 gas pipeline under the Baltic Sea, designed to pump Russian gas directly to Germany.
But the unnamed officials warned the prospect of direct intervention from the US in the EU’s energy interests should trigger a collective response.
Tensions between the two global superpowers have escalated this week, with Washington announcing the -possibility of tariffs on $3.1billion of proudicts from Germany and other European countries.
Mr Trump has also warned he will slash the number of US troops in Germany, while also repeating a threat to pile several new levies onto the German car industry.
The US President has been vocal of his criticisms of Ms Merkel and her Government, making the Nord Stream, owned by Gazprom PJSC, one of his main targets.
The month he accused Germany of being “delinquent” on defence spending and dispatching “billions” to Russian President Vladimir Putin.
Mr Trump told a rally in Tulsa, Oklahoma last weekend: “We’re supposed to protect Germany from Russia, but Germany is paying Russia billions of dollars for energy coming from a pipeline.
“Excuse me, how does that work?”
In December, the completion of the pipeline was thrown into disarray after the US President signed sanctions targeting pipe-laying vessels.
German officials insisted at the time the pipeline project would only be delayed, but they have now warned the new proposed measures from the US places a huge question mark over the future of Nord Stream.
But one official said that with Mr Trump struggling in the polls ahead of November’s US presidential election, the US President could follow through on previous tariff threats, predominantly on the German car sector.
Earlier this month, German Economy Minister Peter Altmaier issued a warning around the legality of any new sanctions, suggesting the transatlantic relationship between the two countries could sink to new lows.
He said on June 12: “The German government has long had the view that sanctions with extraterritorial effects are in conflict with international law and that they’re not a contribution to advancing international cooperation.
“This position hasn’t changed.”
Five days later on June 17, ministers within the German Parliament on the economic affairs committee met to discuss potential retaliation against any sanctions imposed by the US.
Klaus Ernst, the committee chairman of the anti-capitalist Left Party, said the country’s main political parties agreed that any such measures would break international law.
He said in a statement following the meeting: “The government is called upon to develop and put forward proposals for a measured, clear reaction on behalf of Germany and the European Union.”
Michael Harms, the managing director of the BDI lobby’s East European Committee, said last several industry sectors throughout Germany are worried new sanctions could trigger counter sanctions from Europe.
According to Mr Harms, around 670 companies from 25 countries have so far worked on the Nord Stream pipeline.
Gazprom appear intent on completing the pipeline and has made a request with authorities in Denmark to operate DP3-class vessels in Danish waters.
The Akademik Cherskiy vessel, a DP3-class pipe-laying vessel, arrived at a German Baltic port last month.
But the paper from the German ministry has questioned how Russia plans to proceed with building the remaining 150 kilometres of the pipeline.
The paper added if this is to be finished early next year, construction would have to resume as early as this summer.