[Text/Observer Network Zhang Jingjuan] Shortly after US President Trump publicly announced his long-planned "reciprocal tariff" plan, his ally Musk proposed the idea of establishing a "zero-tariff zone" between the United States and Europe.

According to a report by CNN on April 7, German Vice Chancellor and Economy Minister Habek (Robert Habeck) believed that Musk's remarks showed his weakness and fear. According to a Reuters report, German Chancellor-elect Merz (Friedrich Merz) urgently called for quick action on April 7 to ensure Germany's competitiveness in response to the decline in stock and bond markets.

The report said that Habek stated that Musk's idea was contrary to Trump's policies. "I read what Musk said, and I think it shows weakness, perhaps even fear, because their political actions are completely different," he said.

He said, "If he has something to say, he should go directly to the president (Trump) and say, 'Before we talk about zero tariffs, let's stop all this nonsense and the chaos you created last week.'"

Habek said that all of this was absurd, and his only explanation for this was that he now sees that not only his own company but even the entire national economy will collapse due to the chaos they caused, so he is very afraid."

German Vice Chancellor and Economy Minister Habek Video Screenshot

It was reported that Musk put forward the above view during an interview with Italian Deputy Prime Minister and League Party leader Salvini via video link at the League Party rally in Italy on May 5. He said, "I hope that all parties can reach an agreement - I think so - that Europe and the United States should achieve zero tariffs to establish a free trade zone between Europe and North America."

Musk also expressed during the video link that he hoped the US and Europe could "establish a very close partnership" and have more "freedom of movement" in personnel. "If someone wants to work in Europe or wants to work in North America, in my opinion, they should be allowed to do so."

He added that this "is certainly my advice to President Trump," but he did not elaborate whether this advice was related to tariffs.

Musk Video Link Screenshot Wall Street Journal

On April 2, Trump signed an executive order on the so-called "reciprocal tariff" at the White House, announcing that the United States would impose a "minimum benchmark tariff" of 10% on global trading partners. This rate will be higher for about 60 countries and regions that have large trade deficits with the United States or are reportedly imposing high barriers on US imports. As allies, the EU was also not spared, with the final tariff rate being 20%.

Reuters reported that due to Trump's lack of concessions on the tariff issue and investors betting that rising economic recession risks might force the Federal Reserve to cut interest rates as early as May, global major stock indexes collectively plummeted on April 7.

German Chancellor-elect Merz said that the turmoil in international stock and bond markets had become severe and could worsen further. Germany must urgently restore its international competitiveness more than ever before.

The leader of the Christian Democratic Union said, "This issue must now become the core topic of the current coalition negotiations." He once again urged the new government to implement tax cuts, simplify administrative processes, and reduce energy prices.

Starting Wednesday, Germany and other EU countries will face a 25% import tariff on steel, aluminum, and automobiles from the United States, as well as a "reciprocal" tariff of 20% on almost all other goods.

The report said that these tariff measures would only worsen Germany's economy and make the efforts of the soon-to-be-formed coalition government to pull the largest European economy out of a two-year-long economic recession even more difficult.

German Chancellor-elect Merz Video Screenshot

In the face of the "tariff stick" wielded by the United States, the EU plans to impose retaliatory tariffs on American goods. On April 7, EU Commissioner for Trade and Economic Security Schefcovic said that the first part of the EU's retaliatory tariff plan against the US would begin on April 15, and the second part would start on May 15. He said that EU member states would vote on April 9 on the countermeasures against the US steel and aluminum tariffs, and if the vote passes, the two parts of the EU's retaliatory tariffs against the US would begin to be levied on April 15 and May 15 respectively.

It was explained that as long as the EU Commission's countermeasure proposal does not receive opposition from 15 member states representing 65% of the EU population, it will be passed.

Earlier that day, EU Commission President von der Leyen said that the EU would establish an import monitoring task force and strengthen the single market to counter US tariffs. Von der Leyen also said that the EU had proposed zero tariffs on industrial products to the US. In addition, von der Leyen said that the EU was open to tariff negotiations but was ready for retaliation. She also said that the EU would focus like a laser beam on 83% of global trade outside the United States.

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