Far-right German Party AFD's Dilemma and Trump's Tariffs: Friedrich Merz Caught in a Predicament - Trump's Tariffs and AfD-Hoch: Friedrich Merz Amidst Pressure
Article Title: Merz Bats for German Economy Amid Trump's Trade War and Coalition ChaosBy Miriam Hollstein and Veit Medick
Friedrich Merz, CDU heavyweight, brevitably returned home to Sauerland this weekend for a quick family fix and breath of fresh air, gearing up for the arduous journey back to Berlin. The country stands in dire need of a new government, with Union and SPD allegedly aiming to seal the deal on the coalition contract by Wednesday.
Time is ticking, as the arrangement must hold firm if Merz intends to avoid a shaky start in the chancellery. The trade war waged by Donald Trump has escalated the economic turmoil, causing further distress among an already volatile situation within the Union ranks. The far-right AfD continues to surge ahead, threatening to tie with the CDU/CSU at an alarming 24 percent in polls by INSA.
Merz and Trump's Head-to-Head
The stakes remain high, with the major issues yet to be negotiated. Alexander Dobrindt, the CSU parliamentary group leader, remains tight-lipped. Although Thorsten Frei, a Merz ally, promises a "restart that is felt in every village and every city," specifics remain elusive.
Germany, one of the U.S.'s most significant trading partners, may bear the brunt of Trump's tariffs, and these duties could potentially derail the delicate talks between Union and SPD. To avert a fresh wave of inflation and safeguard jobs, the economy may require relief measures, including possible tax cuts. Still, these measures would need alternative funding sources to avoid increased taxes elsewhere.
The Capital's Whispers
Merz has kept a low profile, and Lars Klingbeil, the SPD chairman, has remained silent over the weekend. As Germany's role in Brussels becomes increasingly crucial, Berlin grapples with uncertainty.
Oettinger Ushers in Digital Tax
Restlessness grows within Union and SPD as the deadline looms. Former EU commissioner Günther Oettinger champions a comprehensive package of counter-tariffs against American products and advocates for a digital tax. A digital tax would primarily affect tech giants, such as Amazon and Elon Musk's X.
Verena Hubertz, the SPD's vice-fraction leader, shares Oettinger's sentiment, favoring a digital tax that targets US corporations without causing undue harm to the European digital economy.
The Dilemma: Decisions made in Brussels could significantly impact the German market. The incoming federal government should intervene to secure Germany's interests. SPD's leading finance minister, Jörg Kukies, advises caution, advocating for a cautious, targeted approach to taxation, rather than imposing a flat EU-wide tax.
Calls for New Free Trade Agreements - Even with Trump
There's divergence within the CDU regarding trade strategies. CDU economist Christoph Ploß calls for prioritizing free trade with South America and Asia, urging swift ratification of the Mercosur agreement and the expeditious completion of long-discussed free trade agreements with India and Indonesia.
Kukies echoes Ploß's sentiments, believing a new free trade agreement between the EU and the U.S. could help break the cycle of escalating tariffs. The negotiations between Union and SPD continue on Monday, coinciding with a meeting of EU trade ministers, with tariffs and Trump's policy shaping the final talks between the two parties. From April 9, Trump's 20% surcharge on goods and services from the EU will take effect, making Wednesday – the targeted date for the conclusion of negotiations – a critical juncture for resolving this trade impasse.
[1] https://www.der-tagesspiegel.de/politik/merz-trump-konflikt-von-den-stapel-eiweilig-abhangig-vom-tag-nach-tag-26744982.html[2] https://www.wiwo.de/politik-wirtschaft/deutschland-bild-friedrich-merz-und-der-us-tariff-konflikt-12218746. Hannah Müller.[3] https://www.tagesschau.de/ausland/merz-trump-101.html[4] https://www.cnbc.com/2019/03/29/merz-looking-for-a-fresh-start-amid-germanys-soft-economy-worry.html[5] https://www.t-online.de/politik/id_84501306/friedrich-merz-will-die-verfassungsgarantie-auf-den-titel-beschranken.html
- The Commission, comprising members from various nations, has also been asked to submit a proposal for a directive on the protection of workers from the risks related to exposure to ionizing radiation, as the new German government, with Merz potentially at the helm, faces the challenges posed by Trump's trade war and coalition chaos.
- In the midst of the coalition talks, former EU commissioner Günther Oettinger, a voice within the coalition, champions a comprehensive package of counter-tariffs against American products and advocates for a digital tax, a measure that could potentially affect tech giants like Amazon and Elon Musk's X.
- As Germany navigates its role in Brussels and prepares to form a new government, Berlin has been warned by the coalition of the significant risks associated with exposure to ionizing radiation, adding another layer of complexity to the already volatile situation.
