Germany's chancellor-in-waiting and leader of the Christian Democratic Union party (CDU) Friedrich Merz speaks during an extraordinary session of the outgoing lower house of parliament, the Bundestag, in Berlin, Germany March 18, 2025. REUTERS/Liesa Johannssen
BERLIN: German chancellor-in-waiting Friedrich Merz faces the prospect of being forced into another pivot before he even takes office.
After Donald Trump’s sweeping tariffs – including a 20% levy on imports from Germany and other European Union countries – Merz’s past confidence in the United States is under threat as trade disruptions make a quick economic recovery even more remote.
With coalition talks between Merz’s conservative Christian Democratic Union (CDU)-led bloc and the centre-left Social Democrats bogged down in disputes over tax policy and migration, trade has been forced onto the agenda.
His alternatives are to reconsider his long-standing opposition to closer ties with China or develop other markets for the export-dependent German economy.
The path ahead for Europe’s largest economy is fraught, adding to the pressure on Merz. He’s already alienated some conservative voters by abandoning fiscal restraint with a spending package that unleashes hundreds of billions of euros in debt financing for defence and infrastructure.
While the 69-year-old CDU leader has been conspicuously silent since the United States tariff announcement, his prospective government partners made it clear that continuing to rely on the good graces of the White House isn’t an option.
“Trump has unleashed a US trade war against the rest of the world,” Nils Schmid, foreign policy spokesman for the Social Democrats, told Bloomberg.
He called for retaliatory tariffs against the United States, diversifying trade relations and coordination with Canada and Mexico as well as Asian partners.
The plan was supposed to be different. Merz had repeatedly made clear that under his leadership Germany would take a tougher stance on China and transatlantic ties would strengthen.
But Trump’s tariff blitz undermines Merz’s planned repositioning and raises the question of where Germany will sell its exports.
Robert Habeck, the outgoing economy minister from the Greens, implied Merz wasn’t up to the task, calling on the next government to abandon “assumptions of the 1990s.”
“We can no longer rely on others to be kind to us,” Habeck said last Thursday in Berlin. “Radical acceptance of reality is the new paradigm by which the new government must act.”
While caretaker chancellor Olaf Scholz quickly called Trump’s tariffs “fundamentally wrong,” Merz has yet to issue any public comment. As Germany was waking up to unprecedented uncertainty over its trade relations with the United States, he published a post about deceased former chancellor Helmut Kohl, who would have turned 95 on last Thursday.
Spokespeople for the CDU declined to comment on Merz’s China policy, saying he’s focusing on the coalition talks.
In the past, Merz’s affinity for the United States and mistrust of China has been obvious. In a speech ahead of the Feb 23 election, he warned business leaders against over-exposure to the Asian powerhouse.
“The decision to invest in China is a decision with great risk,” he told his audience, including Chinese ambassador Deng Hongbo.
“If you take this risk, do it in such a way that it doesn’t endanger the entire group if you have to write off this investment from one year to the next.”
Deng appeared irritated and quickly left, according to people who attended the event, who asked not to be identified.
The Chinese embassy didn’t respond to a request for comment. At the time, the foreign ministry in Beijing called on Germany to view the countries’ ties “objectively and rationally.” — Bloomberg
