The conservative Christian Democrats (CDU/CSU) and center-left Social Democrats (SPD) have announced a coalition agreement, bringing Germany that much closer to forming a new government.

It appears international friction and the recent tariff policies imposed by US President Donald Trump pushed negotiators to reach an agreement sooner, rather than later.

Presenting the new agreement on Wednesday, Friedrich Merz of the CDU, likely to become the country's next chancellor, said Germany was currently facing a "situation of growing geopolitical tensions."

The response of the coalition-in-waiting to these uncertain times, he said, was that "we want to, and we will, help shape change in the world, for Germany."

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Lars Klingbeil, the co-leader of the SPD, added that "this is a turning point. We are living in truly historic times."

When the new government takes office, expected it early May, it will be facing several important challenges on the world stage.

Trump's steep import tariffs and the countermeasures some affected countries have adopted in retaliation have sent global stock markets into a downward spiral and sparked fears of a global trade war. As an export-driven nation, these tariffs have hit Germany particularly hard — and even more so given that its economy has been in recession for more than two years.

The European Union manages trans-Atlantic trade, so Germany cannot act independently in this matter. That's why, in light of its economic vulnerability, the incoming German government is hoping to deescalate.

The coalition agreement states that Germany will aim for "a medium-term free trade deal with the United States," while in the short term, "the coalition parties aim to avoid a trade conflict with the US and focus on reducing import tariffs," on both sides of the Atlantic.

Given Trump's recent series of economic about-faces, this approach might prove a........

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