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 new attempts to reach a flexible industrial deal between the EU and the US, after previous efforts, called TTIP, were suspended in 2017, at the beginning of Trump’s first term.
“A new European-American inititative for joint free trade could prevent a dangerous spiral of tariffs,” Merz said.
However, Merz also made it clear that he expected more difficult situations for European economies after Trump’s inauguration on January 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 also going to start with our rates,'” 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 reduce the prices of unpaid hard work and make the country ideally placed to do business again.
Then, he added, Germany could simply say to the United States: “Yes, we are also in a position to face this festival with you. “
The US is Germany’s most successful export market at roughly 10% of all its foreign sales or €157.9 billion (roughly $163.5 billion) in 2023. The figure continued rising in 2024, based on partial data.
Customs tasks can have serious consequences for the German economy, or at least part of it.
At the same time, the United States is the 3rd largest source of German imports, far China and slightly the neighboring Netherlands, accounting for around 7% of German imports, or 94. 7 billion euros.
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This means that Germany has a record annual industrial surplus with the United States of just over €63 billion, a figure that has increased in recent years.
One statistic absent from this count, however, is the US also being the most common site for direct investment by 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)