Merz delivers two announcements alongside a prediction
In the political landscape of Germany, the newly established black-red coalition government, led by Chancellor Friedrich Merz (CDU), is navigating through a series of challenges. The coalition, formed after the 2025 federal election, has a comprehensive 144-page coalition agreement outlining government priorities and policies for the next four years[1][3].
However, the government's stability and credibility have been tested recently, with the delay in the appointment of federal constitutional judges[4]. This issue has caused some embarrassment for Chancellor Merz, as the vote on appointing three judges to the German constitutional court had to be shelved.
On the international trade front, the government faces uncertainty from the US administration regarding potential tariffs on European exports. The US may impose tariffs of around 10%, with higher tariffs on sectors such as autos, steel, aluminum, and copper. While pharmaceuticals might initially be exempt, they could face tariffs later[2].
The US tariff threat comes amid ongoing negotiations between the EU and the US, with some expectation that an agreement might be reached before early August 2025 or that deadlines will be extended. However, a failure to reach a deal could lead to retaliatory measures from the EU, affecting German export-driven sectors and business confidence[2].
Chancellor Merz has expressed his concern about the potential impact of these tariffs, stating that they would overshadow everything and hit the German export industry hard[2]. To mitigate the negative impacts, Germany might offset some of the effects through fiscal expansion and monetary policy support, but growth is expected to remain subdued around just above 1% in 2025[2].
In domestic politics, the black-red coalition is also dealing with internal disagreements. The short-term cancellation of the election for a federal constitutional judge was due to resistance in Merz's own faction against the SPD's proposed jurist, Frauke Brosius-Gersdorf[4]. This incident has led to criticism from former constitutional judge and CDU minister-president Peter Müller, who stated that the government has been "damaged" by the judges' dispute[4].
Despite these challenges, Chancellor Merz remains calm and expressionless in interviews, unlike his predecessor Olaf Scholz[3]. Merz has also shown no willingness to engage in talks with the Left party for two-thirds majorities[3].
In his first summer interview as Chancellor, Merz stated that conducting judges' elections in the German Bundestag will remain difficult in the future[4]. He also expressed his intention to "really intensively" engage in finding a negotiating solution with US President Donald Trump to address the US tariff issue[4].
Despite the failed constitutional judge election and the ongoing trade tensions, Merz remains optimistic, stating that nothing sensational happened as a result of the failed election[4]. He did not reveal any new answers to a possible solution to the crisis between CDU, CSU, and SPD[4].
The black-red coalition under Friedrich Merz is currently solidifying its governance with a clear plan but is facing immediate judicial appointment difficulties and external economic pressures from potential US tariffs on German and EU exports. How the government handles these judicial appointments and navigates US trade policy will be key to its stability and effectiveness going forward[1][2][4].
References: [1] Bundesregierung (2025). Koalitionsvertrag 2025. Retrieved from https://www.bundesregierung.de/breg-de/aktuell/koalitionsvertrag-2025-1835896
[2] European Commission (2025). EU-US trade relations. Retrieved from https://ec.europa.eu/info/business-economy-euro/single-market/international-trade/trade-relations/trade-relations-third-countries-and-territories/eu-us-trade-relations_en
[3] Spiegel Online (2025). Merz will be the new German Chancellor: What you need to know. Retrieved from https://www.spiegel.de/politik/deutschland/fredrich-merz-wird-neuer-deutscher-bundeskanzler-was-du-wissen-muesst-a-129642096.html
[4] Deutsche Welle (2025). Germany's coalition government embarrassed by failed constitutional judge election. Retrieved from https://www.dw.com/en/germany-s-coalition-government-embarrassed-by-failed-constitutional-judge-election/a-56850791
- The black-red coalition government, led by Chancellor Friedrich Merz, faces challenges in the European Parliament as the delayed appointment of federal constitutional judges has caused controversy and damaging criticism.
- On the European political stage, the ongoing US trade negotiations and possible tariffs on European exports, including German sectors such as autos, steel, aluminum, and copper, present a significant threat to the coalition's economic stability and growth.
