Germany looks to finalize a new trade deal with the U.S. before the end of summer

Chancellor Friedrich Merz has said Germany is pushing to finalize a new trade agreement with the U.S. before the end of summer. Merz acknowledged that a resolution could significantly relieve industrial and equity markets sensitive to trade developments.

Several countries are locked in negotiations with U.S. President Donald Trump to clinch some trade deals before the U.S. issues stringent reciprocal tariffs, which are threatened for next month. U.S. Treasury Secretary Scott Bessent also said the date could be pushed back later for nations thought to be negotiating in good faith.

Germany’s Merz expects auto tariffs, steel, and aluminum tariffs in negotiations

GERMANY EXPECTS US TARIFF DEAL BY SUMMER – MERZ

Chancellor Merz told ARD he expects a resolution to the US-EU tariff dispute before summer ends. This signals progress in trade diplomacy and may ease tension on autos and industrials, offering relief to equity markets sensitive to… pic.twitter.com/ezyU2tTS9J

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The current U.S. tariff pause is set to expire in early July, adding pressure for both sides to reach terms swiftly. Merz argued that even if that deadline is missed, a full agreement may still be wrapped up by late summer.

World leaders assembled at this week’s Group of Seven summit in Canada to push U.S. President Donald Trump to back away from his trade war, which has caused tensions in global economic stability. Most nations represented at the G7 are already subject to Trump’s 10% baseline tariff, with threats of more to come.

Merz stated that key areas of the agreement are expected to include auto tariffs, steel and aluminum duties, and a potential “zero-for-zero” tariff swap. He also told reporters at the summit on Sunday that he would team up with his counterparts from France and Italy to directly discuss the U.S. trade threat with Trump.

“Emmanuel Macron [French President], Giorgia Meloni [Italian Prime Minister], and I are firmly resolved to try, over the next two days, to talk again with the U.S. government to see if we can find a solution.”

-Fredrich Merz, German Chancellor.

Last month, German Finance Minister Lars Klingbeil called for serious negotiations with the U.S. after Trump threatened to impose 50 percent tariffs on European Union goods starting June 1. He also believes that the levies endanger the American economy at least as much as the German and European economies.

Klingbeil also mentioned earlier this month that the new government in Berlin is seeking to pass a 46B euro package of corporate tax breaks over the summer. The announcement came on the day that Trump’s new levies on steel and aluminum came into effect.

Trump says EU not offering fair trade deal, Japan being ‘tough’ too

Trump left the G7 after finalizing a trade deal with the United Kingdom. He highlighted roadblocks on other fronts, saying Tuesday that Japan was being “tough” in trade talks and the European Union failed to offer a fair deal. After leaving the summit early to return to Washington, the President said he was in talks with the EU but didn’t feel that they’re offering a fair deal yet. 

Trump also noted that the EU would either make a good deal or pay whatever the U.S. says they must. In a veiled plea for Trump to back off from his tariff onslaught, European Commission President Ursula von der Leyen appealed to keep trade between them and the U.S. fair, predictable, and open.

The President revealed that Japan would soon receive a letter he had threatened to send to U.S. trading partners who did not reach a deal. Trump called the Japanese tough but argued that in the end, they would get a letter saying, “This is what you’re going to pay.” He also mentioned that pharmaceutical tariffs will be coming very soon.

At the summit, Trump and British Prime Minister Keir Starmer signed the trade deal agreed upon last month. He said the U.S.’s relationship with Britain was “just fantastic,” confirming that they signed the agreement and it’s done. Britain was the first country to sign a preliminary deal with Washington to avoid deeper tariffs, although the 10 percent baseline levy has remained in place.

The U.S. President also mentioned on the first day of the G7 gathering that a trade deal with Canada was possible. He argued that both countries have different concepts, saying that he has a tariff concept and Canadian Prime Minister Mark Carney has a different concept.

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