BERLIN (Reuters) – Germany and France will bring forward plans to introduce a common corporation tax in response to announced the Trump administration, Chancellor said.

The announcement comes amid unprecedented tensions between the U.S. under President and its long-standing European allies Washington’s planned introduction of steel tariffs that fears will distort global trade.

“We have decided, with more emphasis than in the past, to on with the “Common Corporation Tax with France’ project,” Merkel said in her regular weekend video podcast asked how Germany’s relative competitiveness be maintained.

“That means we decide on a joint corporation tax assessment basis for France and Germany, we will also consider the realities that are unfolding in America,” she added in response to questions a business studies student.

At the end of last year, the Trump administration floated a tax plan that envisaged slashing the corporation tax from 35 percent -“very high”, according to Merkel – to 21 percent, prompting protests from European finance ministers.

The Europeans that international tax competition will because of the U.S. moves. So EU members, especially Germany and France, see the need for more tax policy corporation among themselves to make their markets more competitive.

Reporting Thomas Escritt and Gernot Heller; Editing Stephen Powell