Following the re-election of former President Donald Trump and the collapse of the coalition government in Germany, the economic and political landscape is facing uncertainty.
During his campaign, Trump proposed the implementation of the 'Trump Reciprocal Trade Act,' which would match U.S. tariffs with those imposed by other countries. However, the specifics of these tariff increases remain unclear, with suggestions of a 10% tariff on all imports and 60% duties on imports from China.
Trump also targeted the European Union, labeling it a 'mini China' and warning of consequences for not accepting American goods.
Economic experts have cautioned that escalating tariffs could lead to increased costs globally and contribute to inflation.
A report by the German Marshall Fund highlighted projections that the promised Trump tariffs could cost Germany approximately $127 billion over the next four years.
The impact of Trump's victory on Germany's economy and its reliance on U.S. security and open markets raises concerns about the country's future.
Meanwhile, in Germany, Chancellor Olaf Scholz faces a vote of no confidence following the collapse of his coalition government. A confidence vote is scheduled for December 16, with expectations of Scholz losing due to his minority status.
Subsequently, German President Frank-Walter Steinmeier is likely to dissolve the parliament and call for elections, anticipated to be held on February 23, 2025.
As Germany navigates political instability, the EU is confronted with the prospect of a trade war with the Trump administration, while awaiting the outcome of German leadership.
Opposition leader Friedrich Merz, a potential candidate for the German chancellorship, expressed intentions to negotiate with Trump, emphasizing the need for Germany to assert its interests effectively and seek mutually beneficial agreements.
Merz's approach underscores the shifting dynamics in international relations and the importance of strategic negotiations in a changing geopolitical landscape.
