German Chancellor Olaf Scholz has cautioned against the imposition of new trade barriers, emphasising the importance of maintaining global economic cooperation.
His remarks follow the latest tariff measures announced by US President Donald Trump against Mexico, Canada, and China, which have raised concerns over escalating trade tensions.
Speaking after a meeting with British Prime Minister Keir Starmer at Chequers, Scholz underscored the necessity of keeping global markets open, stating that “everyone benefits from globalisation.”
The chancellor acknowledged that the European Union (EU) retains “scope for action” in response to Washington’s trade policies, given its status as a major economic power.
While the US tariffs have so far not been extended to European exports, the possibility of further restrictions remains.
Trump has previously threatened tariffs against EU goods, prompting concerns in Germany, whose economy heavily depends on exports, particularly in the automotive and industrial sectors.
EU’s Position on Trade Tensions
When asked about potential retaliatory measures from Brussels, Scholz adopted a cautious stance, indicating that the EU would seek to preserve economic relations through dialogue rather than confrontation. “We will try to continue economic relations together with the perspective of cooperation and collaboration,” he said.
However, Friedrich Merz, leader of Germany’s opposition Christian Democratic Union (CDU) and frontrunner in the upcoming general election, took a firmer tone. Speaking at his party’s convention, Merz criticised the tariffs as ineffective for resolving trade disputes.
“Tariffs have never been a good idea for resolving trade policy conflicts,” he said, adding that the European Union must present a unified front in negotiations with Washington.
Merz further argued that the burden of these tariffs would ultimately fall on American consumers, potentially leading to domestic opposition within the US itself. He called for the EU to engage in diplomatic efforts to prevent further escalation, while also preparing a strategic response if necessary.
Economic Concerns Ahead of German Elections
The trade dispute comes at a critical time for Germany, as economic uncertainty weighs on voters ahead of the country’s federal elections on 23 February. The German economy, long reliant on strong exports, has experienced two consecutive years of stagnation, leading to growing concerns about future growth prospects.
The automotive sector, a cornerstone of Germany’s industrial output, could be particularly vulnerable should the US extend tariffs to European car exports. Any trade restrictions targeting German automakers would have significant consequences, affecting jobs and supply chains across Europe.
With economic performance ranking as a top issue for voters, both Scholz and Merz are seeking to present strategies to bolster Germany’s economic resilience. Scholz has prioritised maintaining open trade links, while Merz has emphasised the need for strong EU coordination in dealing with US trade policy.
