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Germany braces under collapsing government and looming Trump trade war

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Germany braces under collapsing government and looming Trump trade war

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With the re-election of former President Donald Trump to the White House and the collapse of the coalition government under German Chancellor Olaf Scholz, Germany is bracing for an economically and politically dubious time. 

From the campaign trail, Trump pledged to increase import tariffs on friends and foes alike under the “Trump Reciprocal Trade Act” which would increase all U.S. tariffs to match the taxes enforced by each corresponding country.  

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“If India, China, or any other country hits us with a 100 or 200 percent tariff on American-made goods, we will hit them with the same exact tariff,” he outlined in his campaign agenda. “If they charge US, we charge THEM—an eye for an eye, a tariff for a tariff, same exact amount.”

Former President Donald Trump speaks to a rally crowd on Sunday, Oct. 6, 2024 at the Dodge County Airport in Juneau, Wisconsin. (Jovanny Hernandez/Milwaukee Journal Sentinel / USA TODAY NETWORK via Imagn Images)

GERMANY’S SCHOLZ REJECTS CALLS FOR NO-CONFIDENCE VOTE AS COALITION GOVERNMENT COLLAPSES

However, it is unclear if the president-elect still plans to push these specific tariff increases, as he has also suggested there should be a 10% tariff on imports from all countries, as well as 60% duties on imports from China, according to a Reuters report. 

China was not the only country in Trump’s crosshairs, as the now president-elect also referred to the European Union (EU) as a “mini China” and warned the bloc would have to pay up.

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“They don’t take our cars. They don’t take our farm products. They sell millions and millions of cars in the United States,” he told supporters at an October rally in Pennsylvania. “No, no, no. They are going to have to pay a big price.”

Some economic experts have warned that increasing tariffs – which are paid by companies importing the goods, not by government entities – could lead to rising costs worldwide, including in the U.S., as well as further inflation.

A report earlier this month by the German Marshall Fund (GMF) pointed to findings by Germany’s Institute for Economic Research in Cologne that said the promised Trump tariffs are estimated to cost the country roughly $127 billion over the next four years. 

German Chancellor Olaf Scholz leaves the Bellevue Palace in Berlin on Thursday, Nov. 7, 2024. (AP Photo/Ebrahim Noroozi)

FEDERAL MILITARY DRAFT AGENCY REPOSTS MESSAGE SUGGESTING US IS BECOMING 1936 NAZI GERMANY: REPORT

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“Trump’s victory does not bode well for a Germany that is dependent on U.S. security and thrives on open markets,” the GMF said in its report on how the U.S. election will impact Germany. “And uncertainty in Europe’s largest economy is not ideal when the EU needs to find its place in a world in which the U.S. president is not expected to support the traditional, rules-based international order.”

However, it is not only Germany’s flagging economy that could spell uncertainty for Berlin’s international standing, as Scholz faces a vote of no confidence in January after he fired his Finance Minister Christian Lindner and his coalition government collapsed. 

A confidence vote is now set to be held in Germany on December 16 – which Scholz, given his minority status, is expected to lose. 

European Commission President Ursula von der Leyen speaks during a debate at the European Parliament in Strasbourg, eastern France, on Jan. 17, 2024. (Frederick Florin/AFP via Getty Images)

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The most likely next step will be for German President Frank-Walter Steinmeier to dissolve the parliament and call for elections which are not expected to be held on Feb. 23, 2025.  

The EU now stares down a potential trade war with the Trump administration while one of its leading nations, both geopolitically and economically, will essentially sit as a lame duck while Berlin waits to see who will be next to lead the country. 

German opposition leader Friedrich Merz – who could find himself the next German chancellor – said he intends to cut a deal with Trump.

In an interview with Stern magazine, Merz reportedly said, “In Germany, we have never really articulated and enforced our interests well enough, and we have to change that.

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“The Americans are much more on the offensive. It shouldn’t end with only one side profiting, but rather with us making good arrangements for both sides,” Merz said according to a Bloomberg report on the interview. “Trump would call it a deal.”

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World

Investors brace for a bigger backlash from Middle East war

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Investors brace for a bigger backlash from Middle East war
From being just a fringe risk, conflict in the Middle East has become a top worry for investors unsettled by the prospect of a power struggle in Iran and a protracted regional war, with ramifications for everything from global trade to inflation.
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Tel Aviv analyst shelters from 30 missile sirens in 48 hours, says Iran ‘won’t recover’

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Tel Aviv analyst shelters from 30 missile sirens in 48 hours, says Iran ‘won’t recover’

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The past 48 hours in Tel Aviv have been unlike anything seen before, a leading security analyst has said, as sirens blared amid missile threats following Operation Epic Fury and U.S.-Israeli strikes in Iran.

“We are facing a biblical event — nothing less,” Kobi Michael, a senior researcher at the Institute for National Security Studies and the Misgav Institute, told Fox News Digital, speaking from his shelter in the city.

Like many Israelis, Michael said he had spent hours in reinforced rooms during the ongoing barrage, adding that he was “very experienced in this.”

“But this all requires time and determination, and I do hope that Trump will also have them both,” he said, speaking shortly after the president released a video message stating that the military operation would continue “until all of our objectives are achieved.”

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Explosions from projectile interceptions by Israel’s Iron Dome missile defence system over Tel Aviv. (JACK GUEZ / AFP via Getty Images)

“Trump is the only one who can make the change — and that change will impact the entire region and the international order for years to come,” Michael added.

As of Sunday, Tel Aviv remained under a state of emergency following Iranian missile attacks that caused casualties and widespread damage.

According to The Associated Press, Iranian missile and drone strikes have killed approximately 11 Israeli civilians and wounded dozens more in retaliation for the U.S.-Israel strikes on Iran.

Shrapnel from missile impacts damaged at least 40 buildings in Tel Aviv, and authorities reported at least one death in the area from falling debris.

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The Philippine Embassy in Israel confirmed the death of a Filipino national after a missile strike hit Tel Aviv on Saturday.

TOMAHAWKS, B-2 STEALTH BOMBERS AND ATTACK DRONES POUND OVER 1,000 IRANIAN TARGETS IN 24-HOUR BLITZ

People take shelter as Iran launched missiles and drones towards Israel following the US-Israeli attacks. ( Mostafa Alkharouf/Anadolu via Getty Images)

“We enter our shelter once the siren is heard and stay there until the Home Front Command announces that we can leave,” Michael said.

“Usually, it is about 20 to 30 minutes — unless there are further sirens during our stay. Since yesterday morning, it has happened around 30 times.”

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Israel’s President Isaac Herzog also visited an impact site in Tel Aviv Sunday, delivering a message of resilience.

“The people of Israel and the people of Iran can live in peace. The region can live in peace. But what undermines peace time and again is terror instigated by this Iranian regime,” Herzog said.

EXILED IRANIAN CROWN PRINCE SAYS US STRIKES MARK ‘BEGINNING OF THE VERY END’ FOR REGIME

Israeli emergency service officer walks past building debris at the scene of a Iranian missile attack. (Ahmad GHARABLI / AFP via Getty Images)

Following the reported killing of Iran’s Supreme Leader Ayatollah Ali Khamenei and roughly 40 senior Iranian officials, Iran formed a provisional leadership council.

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Iran named Ayatollah Alireza Arafi, President Masoud Pezeshkian and Judiciary Chief Gholam-Hossein Mohseni-Eje’i to lead roles.

“The Supreme Leader did not complete the necessary groundwork regarding his own succession,” Michael added.

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“Pezeshkian will face very troubling challenges due to their heavy losses, severe disruptions to control and command systems, and the massive bombing and attacks across Iran, including Tehran,” he said.

“Even if this regime doesn’t collapse, it will never be able to reconstitute itself, recover or return to its previous position,” Michael added.

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Israel FM says Europe too divided, slams Spanish PM

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Israel FM says Europe too divided, slams Spanish PM

Israeli minister Gideon Sa’ar said Europe “does not have unified position” on what role it should play in Iran as European ministers sought to establish a joint approach Sunday.

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As Israel and the United States conducted a joint military strike on Iran, leading to the killing of Supreme Leader Ayatollah Ali Khamenei, Europe was kept on the sidelines.

EU member states did not participate in the operation and, in some cases, they were not informed prior as it is customary among strategic allies.

Asked whether Israel sought to keep Europe on the margins, Sa’ar said internal divisions within EU member states had kept them out of critical exchanges of operational details, unlike the United States, which the minister described as his country’s greatest ally.

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“In Europe, you have all kinds of approaches,” he told Euronews. “You have countries like the Czech Republic which is strongly supporting this operation and then you have Spain, which is standing with all the tyrants of the world.”

On Saturday, Spanish prime minister Pedro Sánchez was among the most critical voices in Europe, suggesting the US-Israeli strikes on Iran risk plunging the region into total war.

“We reject the unilateral military action of the United States and Israel, which represents an escalation and contributes to a more uncertain and hostile international order,” Sánchez said Saturday. The Spanish PM reiterated that message on Sunday.

“We urge for de-escalation and call to respect international law in all conflicts,” Sánchez added. “You can be against a heinous regime, like the Iranian regime, while also rejecting a military intervention that is unjustified, dangerous and outside of international law.”

Sa’aar said Israel considers the operation “fully justified” citing the right to self-defense from a regime that “has called for the destruction of Israel” and lashed at the Spanish prime minister for sending an “anti-Israeli, anti-American message.”

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“Read the statement, they are standing with Iran!” he added.

When asked if any of his European counterparts had manifested an interest in joining the military operation or provide support on the ground, Sa’ar said he held multiple exchanges with European ministers over the weekend and suggested that “if others want to join, they will know have to convey the message.”

On Sunday, Commission President Ursula von der Leyen appeared to back regime change in Iran in line with Israel and the US, saying that the “risk of further escalation is real. This is why a credible transition in Iran is urgently needed” in comments on Sunday.

Sa’ar told Euronews said the strategic strikes and the elimination of Khamenei alongside top regime commanders could “create the conditions to weaken the regime enough to allow the Iranians to take their future into their own hands”.

“The future leadership of Iran should be determined by the Iranian people through free elections. Our only requirement is that whoever comes to power in Iran must not pursue the destruction of Israel,” he said.

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Watch the full interview on Euronews from 8pm CET

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