US may withdraw from global trade, EU must prepare now - Merz
Photo: Future Chancellor of Germany Friedrich Merz (Getty Images)
The future chancellor of Germany, Friedrich Merz, does not rule out a severe financial crisis due to the tariff policy of US President Donald Trump and outlined key options for addressing the threat, according to an interview with the politician for Handelsblatt.
According to Merz, Donald Trump's tariff policy increases the risk of a financial crisis and he advocates for a free trade agreement between the US and European countries.
"Yes, I hope for a new transatlantic free trade agreement. Zero tariffs on everything. That would be better for both sides," he said.
Merz stated that Europe will have to focus on third-country markets if the US decides to fully withdraw from global trade.
"President Trump's policy increases the risk that the next financial crisis will occur sooner than expected. We, Europeans, must give a convincing response," said the future head of the German government.
US-Europe trade war
On April 2, US President Donald Trump signed an executive order imposing new tariffs on goods imported from over 180 countries. The tariff rates range from 10 to 54%, depending on the country and specific groups of goods and raw materials.
In particular, the executive order imposes a 25% tariff on steel and aluminum imports from EU countries. Brussels responded to this decision by introducing tariffs on US imports worth €21 billion.
The EU proposed to the US to introduce reciprocal "zero for zero" tariffs on industrial goods. However, Trump stated that this proposal was insufficient and suggested that Europe compensate by purchasing US energy resources.
On April 9, Trump reduced the tariff rate for European countries to 10%. In response, Brussels postponed the 25% tariff imposition for 90 days and expressed readiness for negotiations.
