Friedrich Merz: “We don’t have a trade war with China, and we don’t want one”

Berlin. Just the day before, Friedrich Merz promoted Germany as an investment location. Now the Chancellor will be standing again on Wednesday in the hall of the ESMT University on Berlin's Museum Island. This time it's about more than location marketing: it's about defending free world trade at a time when trade itself has become a weapon.

“A new wave of protectionism is throwing a stick between the legs of free world trade,” said Merz at the opening of the “Berlin Global Dialogue” conference. Some states deliberately weaponized dependencies. “We must be prepared to defend our economy.”

Russia is carrying out hybrid attacks to divide Europe while the war in the Middle East is disrupting the global energy system, Merz said. China and the United States engaged in “fierce competition” for economic and military advantages as well as for “technological supremacy,” particularly in the area of ​​artificial intelligence.

Strengthen competitiveness

But the answer cannot be to give up or to isolate yourself, says the Chancellor. Rather, Germany and Europe must reflect on their strengths, defend themselves against unfair practices and, above all, strengthen their own competitiveness.

Another head of government had already formulated the idea that middle powers should not hide a few months earlier in Davos. Canadian Prime Minister Mark Carney spoke there in January of a “rupture” in the world order. His core message at the time: The old order is not returning, and middle powers must act together. “If we’re not at the table, we’re on the menu,” Carney said.

EU summit

Merz draws a similar line in Berlin. “We are not helpless,” he says, and he calls on everyone who believes in a rules-based order to come together: “We need trade agreements everywhere in the world.” Next week he will fly to Singapore, Japan and South Korea to expand cooperation with “our closest partners in Asia”.

Fragile growth

The global economic order is currently being reshaped, says Merz. There remains room for optimism, “the global economy is resilient”. There is still room for growth, but this growth is on “shaky ground”.

"The federal government is working on new economic strength and resilience. We have to renew our own strength," said Merz, "for ourselves, our old and our new partners." The Chancellor also says that many tasks have been left behind in Germany. But his government wants to continue to catch up through reforms and investments. “We have to deliver,” emphasizes Merz.

With regard to China, he adds that the EU's increased trade deficit is unsustainable. “We don’t have a trade war with China, and we don’t want one,” says Merz, but all states have to stick to the rules. When it comes to China, people are talking about an undervalued currency, high subsidies and overcapacity.

That is the reason why he and French President Emmanuel Macron proposed stronger defense instruments for the EU Commission. But they act differently than the USA, which has closed its market to most Chinese companies and products. "That is not the case in Europe. We are open and want to stay open," emphasizes Merz.

The Chancellor also explains that he has proposed a “Miami Growth Agenda” to the USA for the G20 meeting next December. He wants to work together to reduce bureaucracy, push ahead with necessary structural reforms and make investments easier. “These are the prerequisites for new growth and prosperity, not just here in Germany, but worldwide.” He also appealed to US President Donald Trump to invite African representatives to the G20 summit in Miami. “Africa belongs at the table.”