German conservative leader Friedrich Merz, widely regarded as a potential successor to Olaf Scholz as chancellor, has expressed support for renewed efforts to negotiate a free trade agreement with the United States. Speaking to the German news agency dpa, Merz emphasized the importance of fostering economic collaboration amid challenging trade conditions.

In an interview published Thursday, Merz highlighted the economic difficulties Europe may face under U.S. President-elect Donald Trump. Rather than imposing tariffs, he argued, Germany and Europe should focus on restoring competitiveness.

“We need a constructive agenda with the United States that benefits consumers on both sides of the Atlantic,” Merz stated. “A new transatlantic initiative for free trade could help prevent a dangerous cycle of escalating tariffs,” added the Christian Democratic Union (CDU) leader.

During his first term, Trump terminated negotiations on a proposed EU-U.S. trade deal and initiated several trade disputes with the European Union. Ahead of the 2024 U.S. elections, Trump has signaled plans to impose significant tariffs on EU goods, a move that would severely impact Germany’s economy, as the U.S. is its largest export market.

Merz also outlined the need for Germany to reduce corporate tax rates to 25% and address high non-wage labor costs, positioning the country as a more attractive business destination. “This approach would allow us to say to the United States: ‘We are ready to compete with you,'” he explained.

Merz’s comments come as Germany prepares for federal elections, with the broader European economy grappling with uncertainties surrounding transatlantic trade relations.