Germany's Merz says Trump tariffs risk fanning a financial crisis

Laura Malsch, Bloomberg News on Apr 12, 2025

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German Chancellor-in-waiting Friedrich Merz said Donald Trump’s tariff policies increase the risk of a financial crisis and advocated for a U.S.-European free trade agreement, picking up on an idea that has drawn a hostile response from the U.S. president.

“Yes, I’m hoping for a new transatlantic free-trade accord,” Handelsblatt, a German business newspaper, cited Merz as saying in an interview. “Zero percent tariffs on everything. That would be better for both sides.”

The European Union has proposed reciprocal “zero-for-zero” tariffs on industrial goods to the U.S. Trump told reporters Monday that proposal wasn’t sufficient and suggested Europe should offset them by buying U.S. energy.

Europe would have to focus on non-U.S. markets if the U.S. decided to bow out of global trade entirely, Merz said.

Merz, who heads the center-right Christian Democratic Union party once led by Angela Merkel, reached a policy deal this week with the Social Democrats to set up Germany’s next government. Lawmakers are poised to elect him chancellor in May.

“President Trump’s policies are increasing the risk that the next financial crisis will hit sooner than expected,” Merz told Handelsblatt. “We Europeans need to come up with a persuasive response.”