BERLIN (Reuters) – German conservative leader Friedrich Merz, who is favored to succeed Olaf Scholz as chancellor, would support a new attempt to negotiate a free trade agreement with the United States in response to tougher trade terms, he told the German news agency dpa.
The European economy will face challenging conditions under US President-elect Donald Trump, Merz said in an interview published Thursday, but the answer should be for Germany and Europe to restore competitiveness, not to impose tariffs.
“We need a positive plan with the US that will benefit American and European consumers alike,” Merz said.
“A new European-American initiative for joint free trade could prevent a dangerous spiral of tariffs,” added the leader of the opposition Christian Democrats.
Trump, who is due to take office about a month before a federal election in Germany, ended talks on a proposed trade deal between the European Union and the US during his first term and instead pursued a series of trade disputes with the EU.
Ahead of the 2024 US vote, Trump said he would impose high tariffs on goods from the EU, which would hit Germany’s already lagging economy particularly hard because the United States is its biggest buyer.
Merz added that Germany must gradually lower its corporate taxes to 25% and tackle non-wage labor costs to become an attractive place to do business again.
Then Germany could say to the United States: “Yes, we are ready to face this competition with you,” he said.
