Despite President Donald Trump's aggressive tariff policy, trust between Europe and the USA has not yet broken, said Joerg Kukies, on Thursday, the incumbent German finance minister to CNBC.
“In order for the trust to be broken, much more would have to happen, since the transatlantic partnership was built over so many decades that we are not torn through the tariff by the customs declaration,” he told Carolin Roth from CNBC on the sidelines of the IMF -early meeting of the World Bank.
Kukies added that during an earlier visit to Washington, shortly after the 25% tariffs for all cars imported into the USA, it was announced that it seemed to be interested in reaching an agreement.
Europe and the United States have different interests and both parties have to understand the other, he said. “But this is not the first time that the United States and Europe negotiate on tariffs, so I don't think we are near a crisis moment.”
Kukies contributed a positive tone when he referred to conversations and said “everything in negotiating mode” with the block “optimistic” that it can fix the differences.
A tariff agreement with zero-for-zero would be his preferred result, explained Kukies. This corresponds to what the President of the European Commission, Ursula von der Leyen used.
However, Trump has already rejected a proposal from the European Union for a deal in which the industrial goods imported from the USA and for imports from the EU would not take place.
Germany is currently subject to 10% tariffs – the interest rate that was originally reduced by Trump according to the 20% approval.
The country's fighting economy depends heavily on the trade, as the United States serves as the most important trading partner. Trump led by Trump is therefore likely to hit Germany particularly hard.
On Thursday, the German government revised its forecast for the country's economic growth and now explained that it was expecting stagnation in 2025. This corresponds to the growth of 0.3% in January.
The incumbent Minister of Economics Robert Habeck in a press conference cited the trade policy of US President Donald Trump and its effects on the German economy as the main reason for downward revision.
The IMF in its latest global economic outlook, which was published at the beginning of this week, also reduced its expectations of the German economy, with the committee now predicted a contraction of 0.2%.
The Germany's economy has been fighting for some time and worked together every year both in 2023 and 2024. However, the country has avoided a technical recession, which is characterized by two consecutive quarters of the contraction. The latest gross domestic product data is to be published next week.
However, there could also be some positive on the horizon after a large fiscal package was anchored in Germany in Germany at the beginning of this year. It included changes to the long-term debt brake rule, which enable higher defense spending and a 500-billion euro infrastructure investment fund ($ 569 billion).
Germany's debt brakes limit how much debt the government can take over and the size of the structural budget deficit of the federal government dictates
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