Germany's Response to Tariffs: A Call for Competitiveness

Friedrich Merz urges swift action to bolster Germany's competitiveness amid U.S. President Trump's tariffs. Germany faces import tariffs, compounding the recession. Merz stresses tax cuts, reduced red tape, and lower energy prices as coalition talks progress. EU seeks coordinated tariff response as market sentiments waver.

Chancellor-in-waiting Friedrich Merz has called for decisive measures to strengthen Germany's global competitiveness amid escalating trade tensions instigated by U.S. President Donald Trump's tariffs.

Monday saw a significant tumble in major stock indexes, following Trump's indications he would proceed with comprehensive tariffs, with many investors anticipating a potential Federal Reserve rate cut by May due to recession risks. Merz emphasized the urgent need for Germany to regain its international standing, highlighting this priority in coalition negotiations with the Social Democrats.

Faced with steep U.S. tariffs on steel, aluminium, and automobiles, Germany and other EU nations are bracing for a 20% reciprocal tariff on almost all other goods. This further complicates Germany's path out of a lengthy recession. The European Commission is coordinating a cohesive response, reinforcing Merz's call for Europe to lessen its dependence on the U.S. for defense strategies.

(With inputs from agencies.)