German opposition leader Merz: Willing to negotiate a new free trade agreement with the United States

German opposition conservative leader Merz said he would support new negotiations on a free trade agreement with the United States to deal with tougher trade terms.

Friedrich Merz, head of the opposition Christian Democratic Union (CDU), said in an interview with DPA on Thursday (Jan 2) that the European economy will face challenges under U.S. President-elect Donald Trump, but Germany and Europe should respond by restoring competitiveness. Instead of imposing tariffs.

"We need a positive agenda with the United States that benefits both American and European consumers, and a new joint EU-US free trade initiative can prevent a dangerous tariff spiral," he said.

Merz added that Germany needs to gradually cut corporate tax to 25 percent and address non-wage labor costs to make Germany an attractive place to do business.

Only then, he said, could Germany say to the United States: "We are ready to compete with you, too."

In his first term, Trump ended negotiations on a proposed trade deal between the EU and the United States and turned to some trade disputes with the EU.

Ahead of the 2024 US election, Trump had said he would impose high tariffs on EU goods, dealing a severe blow to the already lagging German economy as the US is the biggest buyer of German goods.

The coalition government led by German Chancellor Angela Scholz collapsed earlier, and President Frank-Walter Steinmeier announced the dissolution of the Bundestag last month, officially setting the date of early elections for February 23, and Merz is seen as a favorite to serve as the new chancellor.