Trump actions could trigger new financial crisis: German CDU chief
5 Min Read
The leader of the German Christian Democratic Union criticizes the economic policies of US President Donald Trump and their possible ramifications.
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Friedrich Merz, Christian Democratic Union party chairman, addresses the media after reaching an agreement between their parties on a coalition for a new German government at a news conference in Berlin, Germany, Wednesday, April 9, 2025 (AP)
German CDU/CSU bloc leader and likely future chancellor Friedrich Merz warned on Saturday that US President Donald Trump's economic policies could hasten the arrival of a new global financial crisis.
"I have always said that the next financial crisis is coming. We just do not know when or why. President Trump’s policies increase the risk that the next financial crisis will come sooner than expected," Merz told German newspaper Handelsblatt in an interview.
Merz, who is expected to visit the United States soon, said he would coordinate his position with Germany's European partners before making the trip. He emphasized that while Europe must stand ready to defend its interests and values, maintaining "good and strong" relations with Washington remains essential.
"Free trade is still necessary and is the basis for our mutual prosperity. And yes, I hope for a new transatlantic free trade agreement. Zero percent tariffs on everything. That would be better for both sides," Merz said, when asked about the future of economic cooperation between Europe and the US.
'EU should seek alternatives'
However, he cautioned that if Trump chooses to "abandon globalization" and maintain high tariffs, the European Union should intensify efforts to build economic ties elsewhere.
"The US is not planning to become self-sufficient and withdraw from all markets. If, contrary to expectations, this eventually happens, we must remember that the world is not just the US… In other words, about 7.6 billion people in the world live outside the US. We should reach out to other parts of the world, now more actively than before, and offer cooperation and new free trade agreements," Merz said.
He called for the swift conclusion of a free trade agreement with South America's Mercosur bloc and advocated for expanded trade relations with Canada, Mexico, India, Japan, South Korea, African nations, and Pacific countries such as Australia and New Zealand.
'EU will unite against Trump tariffs'
German Chancellor Olaf Scholz in March emphasized that Europe was committed to cooperation with the United States, but the European Union would respond collectively when Washington imposes tariffs on steel and aluminum.
Speaking at the opening of the Hanover industrial trade fair, where Canada is this year's partner country, Scholz also reaffirmed Canada's sovereignty.
Regarding Trump’s proposed tariffs, the German Chancellor countered "my country first" policies by advocating for expanded free trade, enhanced competitiveness, and greater technological sovereignty.
He asserted that Europe is neither naive nor weak, warning that trade wars harm all parties involved.
"So I say to the United States: Europe's goal remains cooperation. But if the U.S. leaves us no choice, such as with the tariffs on steel and aluminium, we as the EU will react as one," Scholz indicated.
