Merkel vows compromise with U.S. on trade, military spending

BERLIN German Chancellor Angela Merkel vowed on Saturday to seek compromises on issues like trade and military spending with U.S. President Donald Trump, adding she would work on preserving the important relationship between Europe and the United States.

“He made his convictions clear in his inauguration speech,” Merkel said in remarks broadcast live, a day after Trump vowed to put ‘America first’.

Speaking at a news conference in the south-western town of Schoental, Merkel struck a more conciliatory tone toward Trump than Vice Chancellor Sigmar Gabriel, who on Friday said Germany should prepare for a rough ride under the new U.S. president.

Relations with the United States, Germany’s biggest trading partner, are likely to be a hot topic in electioneering in coming months leading to a general election in September.

“I say two things with regards to this (speech): first, I believe firmly that it is best for all of us if we work together based on rules, common values and joint action in the international economic system, in the international trade system, and make our contributions to the military alliances,” Merkel said.

The conservative German leader, who is seeking a fourth term and enjoyed a close relationship with former president Barack Obama, is seen by liberals across the Atlantic as a voice of reason that counterbalances rising populist parties in Europe.

‘EXCHANGE IDEAS WITH RESPECT’

Trump has criticized Merkel’s decision in 2015 to throw open Germany’s borders to asylum seekers fleeing wars and conflicts, and has said he believes other countries will leave the EU after Britain and that the NATO military alliance was obsolete.

“And second, the trans-Atlantic relationship will not be less important in the coming years than it was in past years. And I will work on that. Even when there are different opinions, compromises and solutions can be best found when we exchange ideas with respect,” added Merkel.

German government sources told Reuters this week that Merkel was working to set a date this spring for a meeting with Trump.

Under fire from Trump for not meeting NATO’s goals of spending two percent of national output on defence, Germany said this week that it would meet that goal and demanded that the new U.S. administration map out a consistent foreign policy.

Trump’s threat to pursue a protectionist trade policy is a major concern for Germany, a leading exporting nation that gets nearly half its gross domestic product from exports.

Trump has warned that his administration will impose a border tax of 35 percent on cars that German carmaker BMW plans to build at a new plant in Mexico and export to the United States.

Gabriel, who is also economy minister and heads the left-leaning Social Democrats in a coalition with Merkel’s conservatives, said Germany will have to craft a new economic policy geared toward China should Trump pursue protectionism.

(Additional reporting by Reuters TV in Schoental, Germany; Editing by Toby Chopra)