Anticipates U.S. Trade Agreement, Says Merz
Chillin' with Merz: German Chancellor Optimistic About US Trade War Avertion 🇩🇪🇺🇸
German Chancellor Friedrich Merz is keeping his fingers crossed for a US trade deal, especially for the auto industry. Merz is hopeful that a trade agreement can be reached by July 9, though he acknowledges it won't cover all sectors. "I'm confident we can reach an agreement, but it won't be comprehensive," Merz declared on the sidelines of the G7 summit in Canada.
Merz highlighted that the auto industry is crucial for Germany's economy, and a swift resolution is needed to avoid steep costs. Trump's 25% import tariffs are causing some financial pain, and Merz isn't mincing words. "We need to sort this out pronto, or it'll end up being too costly," he said.
Interestingly, Merz made it clear that the EU will be spearheading the negotiations for all member states, emphasizing the need for collective bargaining power. "We can't chop it up like Britain did," he quipped.
Von der Leyen Talks Tactics
European Commission President Ursula von der Leyen was tight-lipped about the negotiation status, but she did mention having a fruitful chat with Trump the day prior. Von der Leyen acknowledged the negotiations are a complex dance due to the extensive trade relationship between the USA and EU—it's roughly 1.5 trillion euros worth of business annually.
When Trump took office, he ignited a new trade war by announcing new tariffs on EU imports, aiming to correct trade imbalances and shift production to the USA. The tariffs were met with backlash from the EU, who viewed them as unjustified and against World Trade Organization rules.
The EU Plans to Stand its Ground
In a recent surprise move, Trump delayed certain tariffs after turbulence on the stock and financial markets, granting countries a 90-day respite that ends on July 9. The pause provides a window for negotiations.
Merz shared that progress is being made inch by inch. If negotiations fail, the EU has vowed to take decisive action against US tariffs. That may include counter-tariffs, among other measures.
Despite the ongoing tensions between the USA and EU on tariffs, there haven't been any recent breakthroughs or escalations reported in the automotive sector as global trade headlines focus on the US-China trade deal, ASEAN’s economic strategy, and the US-UK finalized trade agreement[1]. EU discussions instead focus on modernizing free trade agreements with partners like Mexico, rather than turning their attention to the USA[2].
In the words of Merz: "Let's keep our collective chill and see how this plays out." 🌟 🛍️ 🇪🇺 🇺🇸
- The German Chancellor, Friedrich Merz, believes that a US trade agreement, particularly for the auto industry, is crucial for Germany's economy and is confident that an agreement can be reached by July 9, though it may not cover all sectors.
- European Commission President, Ursula von der Leyen, mentioned having a fruitful chat with Trump recently and acknowledged the negotiations between the USA and EU are complex due to their extensive business relationship.
- If negotiations between the USA and EU fail, the EU has vowed to take decisive action against US tariffs, which may include counter-tariffs and other measures, as they focus on modernizing free trade agreements with partners like Mexico instead of turning their attention solely to the USA.
