One government figure, granted anonymity to speak about a sensitive area of policy, told POLITICO the key focus of negotiation, at least in the short term, will be the steep sectoral tariffs on steel and automobiles.
There is some optimism about Britain’s prospects of getting a deal on the sectoral tariffs — but those hopes could easily be dashed given Trump’s propensity to change his mind.
Poor Germany didn’t even have a government!
Trump’s on-again, off-again global trade war put great pressure on Germany’s incoming conservative chancellor, Friedrich Merz, to rapidly form a government capable of helping forge a European response.
One of Merz’s core election promises to voters was to revitalize Germany’s struggling economy, which has contracted for two years in a row. But Trump’s tariff threats pose a particular risk to Germany’s export-oriented economy, potentially neutralizing many of Merz’s economic initiatives even before he’s had a chance to implement them.
Merz now advocates a carrot-and-stick approach when it comes to Trump, supporting tough countermeasures on new tariffs while also pushing for a free-trade agreement with the U.S.
“We are determined to fight back, and you can see from this example that [European] unity helps,” Merz said in a German television interview. But, he added, “the best thing we can do is all join together in transatlantic trade and impose 0 percent tariffs and then the problem will be solved.”
Gabriel Gavin, Andrew McDonald, James Angelos, Matt Honeycombe-Foster, Koen Verhelst and Joshua Berlinger contributed to this report.