Recently, candidate for German Chancellor, Friedrich Merz, expressed his support for initiating new negotiations on free trade agreements with the incoming U.S. President, Donald Trump.
In an interview published on January 2, Merz told the German news agency (DPA) that the European economy will face serious challenges during the presidency of Trump, elected to take office on January 20. However, he emphasized that Germany and Europe’s response should focus on restoring competitiveness rather than imposing tariffs.
“We need a positive agenda with the United States that benefits both American and European consumers. A new transatlantic free trade initiative can prevent the continual rise of tariffs,” Merz said.
Prior to the federal parliamentary elections in Germany’s lower house on February 23, Merz, a conservative leader, currently leads in various opinion polls. If elected as Chancellor, revitalizing Germany’s economy will be one of his top priorities.
During his first term, Trump ended negotiations on a proposed trade agreement between the European Union and the United States, and escalated several trade disputes with the EU.
Throughout the presidential election, Trump indicated that he would impose high tariffs on EU goods, which could severely impact the already lagging German economy, given the U.S. is Germany’s largest buyer.
Merz also stated that Germany needs to gradually reduce corporate taxes to 25% and address non-wage labor costs (costs other than wages, such as social security costs) to once again become an attractive business environment.
(This article is based on reports from Reuters)