German Finance Minister Lars Klingbeil said he was optimistic about relations with Washington after a meeting with U.S. Treasury Secretary Scott Bessent on May 21.
Speaking to journalists at the Group of Seven (G7) ministerial meeting in Banff, Canada, Klingbeil said: “I noticed the positive signals and believe we can build on them.”
Ongoing trade disputes with the United States should be resolved as quickly as possible for the benefit of all, Klingbeil said on May 20, ahead of the meeting.
Klingbeil, who also serves as vice chancellor in the German government, said that he and his counterpart had agreed to meet again in Washington.
Germany’s center-right Christian Democratic Union, which emerged as the winner of the federal election, headed by Chancellor Friedrich Merz, is seeking to woo the United States as its export-dependent economy has been in a downturn for two years.
Finance leaders from the G7 industrialized democracies discussed U.S. President Donald Trump’s tariffs.
If no trade deal is reached by the end of that 90-day window on July 8, the full 20 percent rate will automatically kick back in on EU imports.
The U.S. levy of 25 percent on most imports from Canada remains in force.
“There’s been a marked improvement in the mood,” a spokesperson for French Finance Minister Eric Lombard said after Lombard’s bilateral meeting with Bessent. “We had sincere and honest discussion between allies.”
Canadian Finance Minister François-Philippe Champagne told reporters that he had a good meeting with Bessent.
“We get along very well. We got along very well,” Champagne said, declining to provide specifics.
According to a recent European Commission Economic forecast for Germany, after slightly contracting for two years in a row, economic activity is expected to broadly stagnate in 2025.
Germany, Europe’s largest economy, is known for its skilled labor force and high-end exports.
The country has been struggling with the loss of affordable Russian gas, historic Volkswagen plant closures, and fierce competition from cheaper Chinese electric vehicles.
The German government’s deficit is set to remain elevated, and the government debt ratio is expected to increase to 64.7 percent of gross domestic product in 2026.
The package allows the government to borrow beyond normal debt limits for defense and security spending as well as assistance to Ukraine, worth more than 1 percent of gross domestic product.
Up to 100 billion euros ($109 billion), or 20 percent of the infrastructure fund, has been pledged for climate policies.
U.S. credit rating agency Fitch Ratings has said that it expects 900 billion to 1 trillion euros in additional spending from Germany over the next decade.
Merz has been critical of the Trump administration since winning the federal election in February.
Soon after his win, Merz said Trump had shown his administration to be “largely indifferent to the fate of Europe.”
He said that his “absolute priority will be to strengthen Europe as quickly as possible” so that it can achieve “real independence” from the United States.
