United States President Donald Trump’s trade policies are raising the chances that the next financial crisis will occur “sooner than expected,” Germany’s incoming Chancellor Friedrich Merz warned.
“The next financial crisis is sure to come. We just don’t know when and why,” Merz told German newspaper Handelsblatt in an interview.
“President Trump’s policies increase the risk that the next financial crisis will come sooner than expected,” he said.
The tariff regime announced by Trump has sent markets reeling in the last 10 days over widespread fears of a looming recession. Trump eventually paused part of the measures and then on Friday exempted smartphones, computers and other electronics from his reciprocal duties.
Merz’s center-right Christian Democratic Union struck a deal with the center-left Social Democratic Party for a coalition government last week, setting their sights on starting their work on May 6 as pressure from the U.S. is mounting.
Merz’s goal is a new transatlantic free trade agreement with zero tariffs; but he also wants to negotiate trade deals with countries like Canada, South Korea and India. He lamented the fact that the EU-U.S. Transatlantic Trade and Investment Partnership negotiated in the 2010s never got to the finish line.
Germany is open to importing American gas, he said.
Europe must present a united front against the U.S., and seize the opportunity to move forward with key reforms, he said. A top priority is unifying capital markets, where there will be a “new dynamic” in the coming months, following discussions Merz has had with France’s Emmanuel Macron, Poland’s Donald Tusk and the U.K.’s Keir Starmer.
Merz also reiterated some agreement with Trump, saying the EU hasn’t been spending enough on defense. “We have been free riders of the Americans,” Merz said.
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