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Howmet, an aircraft supplier, may stop orders if Trump tariffs are imposed.
According to a letter obtained by, Howmet Aerospace - which supplies parts for aircraft built by Airbus or Boeing - may stop some shipments in the event that tariffs announced by U.S. president Donald Trump are implemented. Howmet, based in Pittsburgh, said that it had declared a force-majeure event. This is a legal term that allows contracting parties to escape their obligations when faced with unavoidable or unpredictable external circumstances. Howmet wrote that it would be excused from providing any products or services impacted by the declared national emergency, and/or tariff executive order. Howmet refused to comment. Howmet supplies critical metal components to the $150 billion jetliner market. Boeing and Airbus have not responded to requests for comment regarding the letter. Three industry sources claim that the letter was sent to multiple companies in the aerospace sector. One source said that this was the first time a major aerospace firm had made a move like this since the announcement of tariffs. Howmet's rare declaration of legal intent does not automatically mean that the supply will be stopped or disrupted, but it opens the door for the supplier to claim they cannot meet their contracts if affected by the emergency order. The letter said that Howmet was willing to work with its customers, "including your interest in reducing the impact of the Tariff Executive Order for Howmet". Three industry sources have said that a successful declaration of force majeure would ripple throughout the supply chain, as companies try to shift the burden. This is just the latest twist in an already hard-hit supply chain for aerospace products. Some companies are now facing higher costs as a result of U.S. duties on imported steel and aluminum, along with new duties that will be imposed by other countries. Trump announced tariffs ranging between 10% and around 50% on Wednesday. This escalated a dispute which has rattled investors, and fueled fears of an upcoming recession. Two sources say that aerospace companies usually contest such maneuvers. They also add that the success or failure of Howmet’s move will depend on how unpredictable the tariffs are, especially since Trump mentioned them during his election campaign. (Reporting from Allison Lampert, in Montreal, and Tim Hepher, in Paris; editing by Joe Brock and Matthew Lewis.)
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Wall St Week ahead-Shell-shocked Markets brace themselves for more tariff turmoil
After the worst week in U.S. stock markets since the start of the coronavirus epidemic five years ago, investors are on edge about the potential fallout of President Donald Trump's import levies. Investors are looking for signs that the stock market is nearing a bottom, at least in the short term. Trump's tariffs have shook global asset prices. The S&P 500 index registered its largest weekly decline since March 2020, while the Nasdaq Composite ended Friday down over 20% from its record high in December. This confirms that the tech-heavy index is currently in a bearish market. The Dow Jones Industrial Average ended the week well below its record high from December, indicating a correction. After Trump's Wednesday announcement, the markets were in a tailspin and fears of a recession were raised. Jeffrey Palma is the head of multi-asset solution at Cohen & Steers. There are many questions regarding tariffs and retaliatory duties, as well as where the situation ends. The S&P 500 closed the week down by over 17% compared to its all-time high of February 19. According to LSEG, in the two days after Trump's announcement of tariffs, S&P companies lost $5 trillion in value. This is the biggest amount in two days. Matthew Miskin is co-chief investment analyst at John Hancock Investment Management. This kind of decline... could lead to a weakening in economic activity. Trump's tariffs will be the most significant trade barriers for more than a hundred years. They include a baseline 10% tariff on all imports, and targeted higher duties on dozens countries. China responded with 34% additional tariffs on U.S. products on Friday, intensifying the trade war. Investors have downgraded economic and earnings predictions, with JPMorgan analysts increasing the risk of global recession to 60% this year from 40% previously. Investors hoped that Trump would make deals with certain countries in the coming days to reduce tariffs. Some investors were skeptical that Trump would make any concessions. Citi strategist Scott Chronert wrote in a Friday note that despite Trump's chance to pivot, the "window is closing and some damage may have already been done to consumer and business trust regardless of what the final negotiated point is," One sign that the future is bleak: The Cboe Volatility Index (an options-based measure for investor anxiety) has reached its highest level since April 2020. The American Association of Individual Investors' survey showed a bearish mood at 61.9%. This is the highest level since 2009. Investors are cautious of gloomy financial forecasts, as tariffs have clouded the outlook. U.S. firms will begin reporting their quarterly results in the next week. According to LSEG IBES, S&P earnings should have risen 7.8% from the previous period in the first quarter. Major banks JPMorgan & Wells Fargo are due to report on April 11, 2019. In a note published on Friday, RBC Capital Markets analysts cut their earnings forecasts for 2025. Keith Lerner is co-chief investment officers at Truist Advisory Services. He said that the market's decline and growing pessimism may mean that news stories are less likely to be able to boost stocks. Lerner explained that "if you had something even remotely positive at this time, you might see a spark in the short term because people are braced to face a negative outcome." The consumer price index report for the month of March, due out on Thursday, could also help establish a baseline in terms of inflation in the United States, before the tariffs are implemented, which will likely increase the pressure on prices. According to LSEG, investors have factored in further Federal Reserve interest rates cuts this year as a result of the announcement of tariffs. Fed fund futures account for 100 basis point of easing in this year. Fed Chair Jerome Powell stated on Friday that tariffs were "larger than anticipated" and that the economic fallout will likely be the same, with higher inflation and slower GDP. Palma of Cohen & Steers said that it is important for the markets to be stable in the next few days. Palma stated that "we've had a couple of really, really big market days." What we don't want is for this to start a vicious cycle which destabilizes our financial system. Reporting by Lewis Krauskopf; additional reporting in San Francisco by Noel Randewich; editing by David Gregorio
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Hedge funds and ETFs sell over $40 billion worth of stocks in response to Trump tariff shock
Hedge funds and leveraged exchange traded funds (ETFs), which are increasingly bearish following President Trump's election, dumped over $40 billion in stocks at an accelerated pace. Donald Trump shock announcement of harsher-than-expected global tariffs, according to bank notes to clients on Friday. S&P 500 companies are reporting a rise in profits since late Wednesday night, when Trump raised tariff barriers to the highest level seen in over a century. Stock market values dropped by over $4 trillion JPMorgan stated in a report that portfolios targeting volatility had between $25 billion to $30 billion of equities they would be selling in the next few days as they unwind their positions to reduce risks. JPMorgan reported that Levered ETFs needed to sell an additional $23billion to rebalance their portfolios before today's close. This was mainly tech stocks. The bank said that macro systematic strategies sold stocks on Thursday at levels higher than expected, and a resurgence of the meltdown on Friday will force them to sell even more. The sell-off was also driven by other strategies. Goldman Sachs said in a separate note that hedge funds who are long or short equities around the world experienced the biggest selling on a global basis on Thursday. They also became the most bearish ever since 2011. Goldman Sachs, JPMorgan and other firms that provide trading and leverage to hedge funds track industry trends by using their clients. JPMorgan said that it also uses some estimates. Goldman has not provided the dollar amount of net sales and has not responded to an immediate request for comments. In a note, the bank stated that portfolio managers added bets primarily against stocks and credit exchange-traded fund on Thursday. They also ditched their long positions after Trump announced new import tariffs which sparked concerns about a recession. The U.S. led hedge fund sales with the financial shares net-sold in the fastest rate since 2016. The bank said that the only sectors where investors purchased on a net-basis were real estate, staples, and utilities. These are the three industries which have a tendency to do well in recessionary conditions. Long/short hedge fund portfolios with more bearish positions outperformed the benchmark S&P 500 Index, which has lost 13.7% year-to date through Friday morning. Goldman said that leverage levels within the hedge fund sector remain near a year-high. (Reporting and editing by Megan Davies and Franklin Paul in New York. Editing by Richard Chang, Diane Craft, and Diane Craft.)
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Oil prices drop as China retaliates against Trump tariffs
Oil prices and global stock markets fell again on Friday, as China retaliated against U.S. president Donald Trump's new tariffs. Worries about a long-term trade war increased. The Nasdaq composite was heading toward a bear-market, and the pan-European STOXX 600 confirmed that it was in correction mode as the trade conflict fanned concerns about a global recession. S&P 500 Companies have lost more than $4 trillion since Trump announced his tariffs on late Wednesday. This is a record-breaking two-day drop for the benchmark. It surpasses a two day loss of $3.3 trillion that occurred in March 2020 when the pandemic ravaged global markets. While the dollar recovered on Thursday, some investors turned to government bonds for safety. China responded to Trump's new tariffs by imposing additional 34% levies on American goods on Friday, which confirmed investor fears of a global trade war. Trump imposed a tariff of 10% on the majority of U.S. imports, and much higher rates on dozens more countries. This is the highest trade barrier in over 100 years. Rick Meckler is a partner at Cherry Lane Investments in New Vernon, New Jersey, a family-owned investment firm. "For investors who thought it was just a simple negotiation, while this may still be true to some extent, it is getting incredibly deeper and more dangerous for businesses." The fact that the U.S. economy created far more jobs in March than was expected did not brighten the mood. Jerome Powell, Federal Reserve Chair, said at a Business Journalists' Conference in Arlington, Virginia that Trump's tariffs were "larger than anticipated" and that the economic fallout would be similar, with higher inflation and slower GDP. He said that the U.S. Central Bank does not predict a decline in its outlook, but acknowledged private sector forecasters are changing their views on this front. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. Companies that have exposure to China fell as well. Apple, Nvidia, and Amazon.com all fell sharply. Globally, bank shares fell as concerns about a recession grew. S&P 500 Financial Index was down 6.8% while Energy was down over 8% due to falling oil prices. The Dow Jones Industrial Average dropped 1,953.69, or 4.78% to 38,601.34, while the S&P 500 fell 288.97, or 5.35% to 5,107.55, and the Nasdaq Composite declined 871.79, or 5.25% to 15,678.81. The MSCI index of global stocks dropped by 41.22 points or 5.1% to 766.4. The pan-European STOXX closed 5.1% lower. This was its largest daily loss since COVID-19-driven selloffs in 2020. The index dropped nearly 12% since its all-time March 3 closing high, which confirmed it was in correction. Japan's Nikkei 225 fell 2.8% overnight for a second session running. Brent crude futures dropped 6.5% and settled at $65.58. U.S. Crude Futures fell 7.4% and settled at $61.99, their lowest level since April 2021. Powell's cautious tone about future easing helped the dollar recover against the yen and euro. The dollar index rose 0.9% last after Thursday's biggest drop since November 2022. The euro fell 0.81% to $1.096. The dollar gained 0.58% against the Japanese yen to reach 146.9. Investors are unsure where to invest their money after years of massive flows into U.S. stock markets and an booming American economy. This helped to drive a strong rush towards the government bond markets. The yield of the 10-year Treasury bill, which is considered to be the benchmark in the U.S., fell by 12.2 basis points from 3.86% to 3.933%. Prices and yields are inversely related. The benchmark yield for the Eurozone, which is the German 10-year bond, dropped as much as 17 basis points during the day. Money market futures are pricing in a Fed rate cut of 110 basis points by the end this year. This is compared to 75 bps about a week ago. The traders also increased their bets for Bank of England and European Central Bank decreases. Meckler stated that "a lot of investors who I have spoken to said, in this type of environment, we should just go cash and wait,"
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Canada's response to US tariffs
Mark Carney, the Canadian Prime Minister, announced on Thursday limited countermeasures to U.S. auto-tariffs. He imposed a 25% tax on vehicles imported from America that do not comply with the U.S. Mexico-Canada Trade Agreement. Carney, the man who succeeded Justin Trudeau last month as Prime Minister, stated that new tariffs will not affect auto parts or vehicle content coming from Mexico. He said that the Canadian tariffs, which are estimated at C$8 billion, before a remission procedure for tariff relief, would go directly to affected auto workers. Donald Trump, the president of the United States, imposed 25% tariffs in March on goods that were not compliant with USMCA. On March 11, he imposed tariffs for steel and aluminum imports. A 25% import tax was implemented on Thursday. Trump spared Canada global tariffs. Here are the retaliatory actions that Canada has taken. First, Trudeau responded to Trump's initial tariffs by imposing 25% tariffs on C$30 Billion ($21.10 Billion) of goods imported from the U.S. annually on 6 March. The C$30 billion is part of a broader retaliation strategy that targets C$155 billion of imports from the U.S. The first batch of retaliation includes 1256 products, including orange juice, peanutbutter, wine, spirits and beer, coffee and other beverages, as well as apparel, footwear and motorcycles. The value of imported products is C$3.5 billion for cosmetics and body products, C$3.4 billion for appliances and household goods, C$3 billion for pulp and paper, and C$1.8 billion in plastics. AUTOS IN ALUMINUM AND STEEL On March 13, Canada increased its tariffs by 25% on additional products worth C$29,8 billion imported from the U.S. The tariffs are expected to stay in place until U.S. steel and aluminum tariffs against Canada are eliminated. Tariffs on steel and aluminum include a variety of products, including candles, glues and umbrellas, as well as kitchenware, gold and platinum jewelry, and other items. Prime Minister's Office announced on April 3 that the new auto tariffs would apply to imports of cars worth C$35,6 billion. Tariffs of 25% will be imposed on vehicles that are not USMCA compliant and on vehicles with non-Canadian or non-Mexican components. Non-tariff Measures Trudeau said Canada was also considering non-tariff measures that could be related to vital minerals, energy procurement, and other partnerships. Carney responded on March 25, when asked if nontariff measures like export taxes or controls were on the table. Canadian provinces have removed U.S. alcohol from store shelves, and Ontario Premier Doug Ford has said that all U.S. companies will not be allowed to participate in government procurement. Ontario has canceled its C$100 million contract with Trump's ally Elon Musk and Starlink. Canada has frozen Musk's Tesla rebate payments and barred the electric vehicle maker from participating in future EV rebates. Toronto has stopped offering financial incentives to Tesla owners who purchase vehicles as taxis or ride-sharing services due to trade tensions with U.S. The PMO announced on April 3 that Canada will also develop a framework to encourage auto production and investment.
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US oil service companies to be hit by Trump tariffs and falling oil prices
Analysts and financial firms warned on Friday that U.S. oilfield services firms were bracing themselves for a blow as President Donald Trump’s tariffs threw supply chains into chaos and the falling oil prices set up a decline in drilling activity. Morningstar, a financial services firm, has lowered its fair-value estimates for SLB, Halliburton and Baker Hughes, the three largest oilfield service companies, following Trump's announcement of tariffs on Wednesday. These firms may see their oilfield revenues drop by 2-3% in 2025. Morningstar estimates that for every dollar of revenue lost, the big three companies could lose $1.25 to $1.35 in operating profit. Ryan Hassler, vice president of Rystad's supply chain research and a specialist in the industry, said that tariffs would have a significant impact on pipes, valve fittings, and sucker rods. SLB shares, the largest oil service firm in the world, fell 12% to $34.60 on Friday, their lowest level since September 2022. This is according to LSEG data. Halliburton's stock fell 10% to just under $20 and Baker Hughes dropped 11% to about $36.40. Trump introduced reciprocal duties on Wednesday. He implemented a 10% base duty on the majority of U.S. imported goods, while some countries such as China faced significantly higher tariffs. Oil prices fell on Friday, after China, which is the world's largest crude importer, increased tariffs on U.S. products. This was the most significant escalation of a global trade conflict that has investors concerned about a possible recession and subsequent drop in oil demand. Crude oil futures were down more than 8% during afternoon trading and headed for their lowest closing since 2021, when the COVID-19 pandemic was in its middle stages. Brent crude, the global benchmark, fell to as low as $49.90 a barrel. U.S. West Texas Intermediate (WTI), however hit a new low of $64.90. Rystad's Hassler stated that if a lower range of $60 per barrel for WTI is sustained for a prolonged period, the activity in the U.S. Shale space could decrease towards the second half year. JP Morgan, an investment bank, said that it now expects the global economy to enter recession by year's end. This is up from 40%. The curtain is falling on global trade, and the future looks bleak. Investors are fleeing risk assets like oil and stocks, as they fear a recession. (Reporting and editing by Marguerita Choy in Houston)
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Thyssenkrupp Steel Unit cancels contract with HKM and remains open for sale
Thyssenkrupp Steel Europe, the continent's 2nd largest steelmaker, announced on Friday that it had decided to terminate a contract with HKM. This is a step further to sever ties to the business, which it owns in part and wants to sell. Thyssenkrupp has been under pressure to streamline its steel business due to high energy prices and low-cost Asian competitors. It warned that it might have to close or sell HKM, which is a 50-30-20 joint enterprise between Thyssenkrupp and Salzgitter. Dennis Grimm said that due to the market conditions we would have to reduce production capacity from 11.5 million metric tones of steel at the moment to a target shipping of between 8.7 and 9 million metric tones in the future. Grimm added that the cancellation of HKM would result in a savings of up to triple-million euros. The cancellation of the agreement means that TKSE will no longer be obligated to purchase around 2.5 million metric tonnes of steel from HKM per year. This obligation expires on December 31, 2032. Grimm stated that TKSE - in which Czech billionaire Daniel Kretinsky holds a 20% stake - remained open to discussions with potential buyers after recent talks with a buyer fell through. (Reporting and Editing by Louise Heavens, Christoph Steitz)
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Oil prices fall as China retaliates against Trump tariffs
Oil prices and global stock markets fell again on Friday, as China retaliated against U.S. president Donald Trump's new tariffs. Worries about a long-term trade war increased. The Nasdaq composite was heading toward a bear-market, and the pan-European STOXX 600 confirmed that it was in correction mode as the trade conflict fueled global recession fears. S&P 500 Companies have lost more than $4 trillion since Trump announced his tariffs on late Wednesday. This is a record-breaking two-day drop for the benchmark. It surpasses a two day loss of $3.3 trillion that occurred in March 2020 when the pandemic ravaged global markets. Investors flocked to government bonds for safety, while traders bet on the Federal Reserve cutting rates and other central banks. China responded to Trump's new tariffs by imposing additional 34% levies on American goods on Friday, which confirmed investor fears of a global trade war. Trump imposed a tariff of 10% on the majority of U.S. imports, and even higher rates on dozens more countries. This is the most severe trade barrier in over 100 years. Rick Meckler is a partner at Cherry Lane Investments in New Vernon, New Jersey, a family-owned investment firm. "For investors who thought it was only a negotiation, while this may still be true to some extent, it is getting awfully more detailed and dangerous for companies." The fact that the U.S. economy created far more jobs in March than was expected did not brighten the mood. Jerome Powell, Federal Reserve Chair, said at a Business Journals Conference in Arlington, Virginia that Trump's tariffs were "larger than anticipated" and that the economic fallout would be similar, with higher inflation and slower GDP. He said that the U.S. Central Bank does not predict a decline in its outlook, but acknowledged private sector forecasters are changing their views on this front. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. Companies that have exposure to China fell as well. Apple, Nvidia, and Amazon.com all fell sharply. Globally, bank shares fell as concerns about a possible recession increased. S&P 500 Financial Index was down by 6%. The Dow Jones Industrial Average dropped 1,601.47 or 3.96% to 38,938.99. The S&P 500 fell 250.57 or 4.64% to 5,144.87. And the Nasdaq Composite lost 787.62 or 4.77% to 15,760.90. The MSCI index of global stocks fell by 37.21 points or 4.61% to 770.43. The pan-European STOXX closed 5.1% lower. This was its largest daily loss since COVID-19 fueled the selloff of 2020. The index dropped nearly 12% since its all-time March 3 closing high, which confirmed it was in correction. Japan's Nikkei 225 fell 2.8% overnight for a second session running. U.S. crude fell 7.74%, to $61.77 per barrel. Brent dropped to $65.33 a barrel, a drop of 6.86%. After the U.S. payroll data, the dollar rose against the euro and the yen. The dollar index rose 0.7% on Friday after Thursday's biggest drop since November 2022. Last time, the euro dropped 0.65% to $1.0979. The dollar gained 0.08% against the Japanese yen to reach 146.18. Investors are unsure where to invest their money after years of massive flows into U.S. stock markets and an booming American economy. This helped to drive a strong rush towards the government bond markets. The yield of the 10-year Treasury bill, which is considered to be the benchmark in the U.S., fell by 12.2 basis points from 3.86% to 3.933%. Prices and yields are inversely related. The benchmark yield for the Eurozone, which is the German 10-year bond, dropped as much as 17 basis points during the day. Traders expect central banks to adopt more accommodating policies. Money market futures are pricing in a cumulative Federal Reserve rate cut of 110 basis points by the end this year. This is compared to about 75 basis points a week ago. The traders also increased their bets for Bank of England and European Central Bank decreases. Meckler stated that "a lot of investors who I have spoken to said, in this type of environment, we should just go cash and wait,"
Germany's election in surveys, parties and policy arguments
Germany will hold a breeze national election on Feb. 23 following the collapse of Chancellor Olaf Scholz's threeway union.
Here are the primary celebrations contending, their survey standings, and the key policy issues:
CELEBRATIONS
Germany has two centrist, big-tent celebrations: Scholz's. centre-left Social Democrats (SPD) and the opposition. conservatives, an alliance of the Christian Democrats (CDU) and. their Bavarian sibling celebration, the Christian Social Union (CSU).
Nevertheless, they have both lost support over the last few years, with. smaller sized parties such as the ecological Greens and far-right. Alternative for Germany (AfD) gaining ground.
The SPD, conservatives, Greens and AfD are all fielding. prospects for chancellor.
Likewise running are the pro-market Free Democrats (FDP), the. far-left Linke and the leftist Sahra Wagenknecht Alliance (BSW),. who are all at risk of missing the 5% threshold to make it into. parliament, according to viewpoint surveys.
POLLS
The conservatives have actually been leading nationwide polls for. more than two years and are at 29.8%, according to the current. survey released by YouGov on Jan. 17, followed by the AfD at. 19.7%.
Scholz's SPD, with 15.6%, has actually dropped to third from the. first put it accomplished in the 2021 election. It is followed by. the Greens on 13.6% and the BSW on 6%. The FDP and Left celebration. are polling at 4.5% and 2.9% respectively.
Nevertheless, analysts say surveys can move quickly, with voters. less devoted to celebrations than they when were, remembering the 2021. election project when the conservatives went from frontrunner. to runner-up within a couple of months.
The conservatives' leader Friedrich Merz, in particular, is. thought about to be prone to gaffes and fast to anger.
POLICY DEBATES
- Ukraine
Germany's mainstream parties all favour helping Ukraine fend. off Russia's major intrusion, while the AfD and BSW desire an. end to weapons deliveries to Kyiv and a resumption of excellent. relations with Moscow.
Nevertheless, Scholz and his SPD have actually just recently struck a more. cautious tone - stressing the requirement for diplomacy and prudence. - than the conservatives, Greens and FDP, who are for example. all in favour of Germany providing long-range Taurus missiles. to Ukraine.
- Reviving the economy
Scholz has proposed incentivising personal financial investment and. modernising facilities with an off-budget 100-billion-euro. fund. His SPD also plans a direct tax refund of 10% on devices. financial investments by companies.
The Greens' Robert Habeck has, like Scholz, required. reform of the constitutionally enshrined debt brake to allow for. greater public spending.
Merz had also indicated some openness to a moderate reform. of the debt brake however his celebration's manifesto has promised to. retain it. The AfD and the FDP are intense protectors of the limitation. on public loaning.
The CDU/CSU manifesto has actually proposed extensive financial. relief for companies and people, including earnings and. corporate tax cuts, and lower electrical power charges. They have not. said how these would be financed.
The AfD desires Germany to ditch the euro, reintroduce the. Deutsche Mark and possibly leave the EU.
- Migration
The anti-Islam, anti-migration AfD has required borders to. be closed and asylum applicants to no longer deserve to. household reunification. Some senior AfD members have actually gone even more. in their comments and were present at conversations among. reactionary activists on deporting countless individuals of foreign. origin, consisting of German residents.
The conservatives have embraced a much stricter stance on. immigration in recent years, calling for pushing back asylum. applicants at the borders, and for limits on family reunifications. and naturalisation for refugees.
They likewise want everyone obtaining asylum in Europe to be. moved to a safe 3rd country for processing their claims.
The SPD itself has toughened its position by enforcing. more stringent border controls and speeding up deportations, although. it also wants to bring in more foreign skilled workers.
On the other hand, the Greens keep a more open asylum policy,. promoting state-backed sea rescue initiatives and streamlining. household reunification processes and improving combination.
- Energy
High energy costs remain a major challenge for homes. and organizations in Germany and an important election campaign. topic.
The CDU, SPD and Greens agree on expanding renewable resource. to decrease costs however differ on financing methods: the CDU. recommends utilizing higher CO2 certificate revenues to lower network. costs, while the SPD and Greens support debt-financed state. subsidies. The CDU and AfD also propose examining a return to. nuclear power, an idea turned down by the SPD and Greens.
The AfD opposes renewable energy aids entirely,. advocating unlimited coal-fired power plant operations and. eliminating CO2 prices to lower consumer expenses and enhance. energy security.
- Relations with the Trump administration
The question of how to tackle the incoming administration of. U.S. President-elect Donald Trump, which has already flagged the. possibility of increased tariffs and lower military assistance for. Europe, is especially sensitive for Germany. The United States. remains the top location for German exports and its main. security ally.
The SPD's Scholz greatly countered Trump's talk about. Greenland and Canada, while frontrunner Merz alerted against. lecturing him, stressing instead locations of possible cooperation. like a potential EU-U.S. trade offer or joint China strategy.
The Greens' Habeck cautioned that the EU should stand united and. look for talks with the U.S. due to the fact that a trade war will eventually. damage all sides.
All of the mainstream parties have voiced scepticism about. Trump's need for European nations to increase spending on. defence to 5% of economic output, given that Germany will. already battle to keep to 2% after its special fund for the. military runs out. Habeck, nevertheless, has actually already proposed an. increase to 3.5%.
The party that has most accepted the inbound U.S. administration among the German parties is the AfD, which. received several endorsements from Trump's ally Elon Musk,. resulting in his conversation on X with the celebration's chancellor. prospect Alice Weidel.
(source: Reuters)