Conservative Christian Democratic Union (CDU) chancellor candidate and favorite in Germany’s February election, Friedrich Merz, has called for a “positive agenda” on the industry with the United States and the return of President Donald Trump.
“We want a positive program with the United States for American and European consumers,” Merz said in an interview with German news agency dpa published Thursday.
He even recommended considering renewed attempts at an EU-US free trade deal, after the previous efforts, dubbed TTIP, were put on ice in 2017, early in Trump’s first term.
“A new Euro-American initiative for a flexible and non-unusual industry could save them from a harmful tariff spiral,” Merz said.
However, Merz also made transparent 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 U. S. to focus more on itself and its own interests, such as raising import price lists, as Trump has repeated several times and since the election campaign.
“But our response is: ‘Now we’re also going to start our tariffs,'” Merz said.
Merz also said that Germany needed to gradually reduce its corporation tax rates towards 25%, with current levels nearer 30%. He said this would tackle non-wage labor costs and make the country an attractive place 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 United States is Germany’s most successful export market, with around 10% of all its sales going abroad, worth €157. 9 billion (around $163. 5 billion) in 2023. This figure continued to increase in 2024, according to partial data.
Customs tasks can have serious consequences on the German economy, or at least part of it.
At the same time, the United States is the third largest source of German imports, behind China and slightly from the Netherlands, and accounts for around 7% of German imports, i. e. €94. 7 billion.
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This means that Germany has a record annual industrial surplus with the United States of just over €63 billion, which has expanded in recent years.
However, one statistic missing from this count is that the United States is also the most common location 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)