Behind Germany’s reluctance may lie not only legal concerns but also a very practical economic calculation. The United States is an extremely important market for German industry, with the automotive sector particularly vulnerable.

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German automakers are already under pressure from Chinese competition, weaker European demand and high costs. Berlin would therefore like to avoid another trade conflict with Washington.

This concern is not hypothetical. Some other European governments are also reluctant to forge closer ties with Canada precisely because they do not want to provoke US President Donald Trump. Trump has now openly threatened Brussels with further trade measures – including new tariffs and even a halt to trade in a wide range of goods – if he perceives Canada’s rapprochement with the EU as a move directed against the United States.

For Germany, potential US tariffs would pose a greater problem than for most EU member states. Its economy is heavily export-oriented, while automakers such as BMW, Mercedes-Benz and Volkswagen have extensive commercial and manufacturing interests in the US market. Although some of their production takes place directly in the United States, higher tariffs would disrupt cross-border supply chains and also affect European subcontractors, including those in the Czech Republic.

It is therefore possible that Berlin will be among the countries seeking to substantially soften the original proposal. This does not necessarily mean an outright veto. One option would be to push for a series of narrower, sector-specific agreements with Canada instead of using the politically explosive term “associate membership”.

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This would make it possible to achieve a large portion of the economic and strategic goals without the EU creating a new status that could be interpreted in Washington as the formation of an economic bloc against the United States.

It is worth noting that Germany was already hesitant during the ratification of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada. Germany did not ratify the agreement until August 2023, while Slovakia, for example, did so in 2019 and the Czech Republic two years earlier. France and Italy, on the other hand, have yet to approve CETA.

This text was originally published on the website lukaskovanda.cz.