As Donald Trump's administration approaches, concerns are rising about potential new trade barriers that could impact the European economy.

Friedrich Merz, the CDU chairman and candidate for chancellor, warns that Trump's administration may impose tougher conditions on Europe, prioritizing American interests and possibly leading to high import tariffs.

In response to these challenges, Merz advocates for a renewed push for a free trade agreement with the U.S., emphasizing the need for a positive agenda that benefits both American and European consumers.

He stresses that Europe should focus on restoring its competitiveness rather than retaliating with tariffs, which could lead to a dangerous trade spiral.

Merz cautions against responding to tariffs with tariffs, noting that countries that isolate themselves through trade barriers become less competitive.

He points out that high labor costs in Germany are a significant barrier to competitiveness and must be addressed at the national level.

Merz argues that if tariffs are imposed on European imports, American consumers will ultimately bear the cost, likely resulting in inflation in the U.S.

Highlighting the declining quality of Europe's business environment, Merz underscores the CDU's commitment to enhancing competitiveness ahead of the federal elections.

To attract businesses back to Germany, Merz calls for gradually reducing corporate tax rates to 25%, acknowledging that this will take time.

Merz reports that many German companies are receiving offers from Trump's transition team to relocate their operations to the U.S., drawn by favorable tax conditions.

Trump's first-day agenda includes plans for high import tariffs on goods from Mexico and Canada, along with pressure on the EU to increase imports of U.S. oil and gas.

Additionally, Trump has expressed concern about the trade imbalance, where European companies sell significantly more goods in the U.S. than American companies do in the EU.