The conservative Christian Democratic Union (CDU) candidate for chancellor, and apparent frontrunner for early elections in February in Germany, Friedrich Merz, has called for a “positive agenda” on trade with the US and returning President Donald Trump.
“We need a positive agenda with the US that benefits American and European consumers alike,” Merz said in an interview with the German dpa news agency published on Thursday.
It is even contemplating further attempts to achieve a flexible industrial agreement between the EU and the US. The U. S. government has been suspended after previous efforts, dubbed TTIP, were suspended in 2017, at the start of Trump’s first term.
“A new Euro-American initiative for a joint flexible industry could save them from a harmful tariff spiral,” Merz said.
However, Merz also made it clear that he expected more difficult situations for European economies after Trump’s inauguration on Jan. 20.
He said it probably makes sense to prepare for the United States to focus more on itself and its own interests, such as increasing import price lists, as Trump has repeated several times and since the election campaign.
“But our reaction to that will be, ‘Now we’re going to start with our tariffs as well,'” Merz said.
Merz also said Germany wants to reduce its corporate tax rate to 25%, with existing securities closer to 30%. He said it would lower prices for non-wage hard work and make the country an ideal position to do business again.
Then, he said, Germany could tell the United States: “Yes, we are ready to face this competition with you as well.”
The United States is Germany’s most successful export market, accounting for about 10% of all its foreign sales, or 157. 9 billion euros (about $163. 5 billion) in 2023. This figure continued to rise in 2024, according to partial data.
Customs tasks can have serious consequences for the German economy, or at least for a part of it.
At the same time, the United States is the third source of German imports, behind China and slightly behind the Netherlands, and represents around 7% of German imports, i. e. 94. 7 billion euros.
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This means Germany has a record annual trade surplus with the US of a little over €63 billion that has been rising slightly in the past few years.
However, one fact missing from this count is that the United States is also the most common place for direct investment through German companies.
Trump has often lamented this imbalance in bilateral trade, particularly during the election campaign. In several interviews he recalled supposed conversations with previous Chancellor Angela Merkel where he had complained about how few US cars were sold in Germany, for instance, compared to German ones in the US.
MSH/WD (DPA, Reuters)