New economy minister says Germany must seek trade deals

Germany must pursue trade deals as part of wider European Union efforts to diversify its markets, new Economy Minister Katherina Reiche said on Wednesday, adding the United States would remain the country's main trade partner.

"We cannot hope that the export and import opportunities for German companies will automatically improve in the coming years. We have to take action ourselves," Reiche said after the handover ceremony with former economy minister Robert Habeck.

She spoke about the importance of diversifying the European Union's trading partners with free trade agreements with countries such as Australia, Chile, India and Mexico, as well as Latin America's Mercosur bloc, but added the United States would remain Germany's main trading partner.

The European Commission is coordinating the 27-nation bloc's response to import tariffs announced by U.S. President Donald Trump, including a 25% levy on its steel, aluminum and cars and an additional 10% on almost all other goods.

"Trade wars have disadvantages for both sides and that is why it is important that we reach a free trade agreement with the U.S.," Reiche said.

The U.S. was Germany's biggest trading partner in 2024 with two-way goods trade totaling 253 billion euros ($287.16 billion).

Industry representatives have underlined the extent of the challenges faced by Europe's largest economy.

Volker Treier, head of foreign trade at the German Chamber of Industry and Commerce, said on Wednesday Trump's trade policy had led investors to lose confidence and postpone investments.

The AHK World Business Outlook for the first part of 2025, which surveyed 4,600 German companies in over 90 countries between March 17 and April 14, showed that only 19% of companies expected the German economy to improve, compared to 27% late last year.

Meanwhile, 33% of the companies surveyed expected a deterioration.

($1 = 0.8811 euros)