Merz Warns Erosion of Global Order Leaves Middle Powers in Europe and Asia Needing Greater Assertiveness

In Singapore, at the start of a four-day business trip that will also take him to Japan and South Korea, German Chancellor Friedrich Merz told his audience that European and Asian nations have to find their own place in a changing global order. "We must assert our interests in an international environment shaped by renewed great-power rivalry," he said.

Merz pointed to two sources of unpredictability: tariffs imposed by the United States under President Donald Trump, and trade restrictions from China. Against both, he offered Germany and Europe as a steadier option. "This is a deliberate counterpoint to what we are currently seeing," he said. "We want to do things differently, and we want to show that there is a better way." He said Europe wants to widen its partnerships to promote free trade built on open competition, reliability and a rules-based order, and he called for more international investment and cooperation.

The economic stakes behind that pitch showed up in China the same day. German President Frank-Walter Steinmeier began a farewell tour in Hefei, the capital of Anhui Province, and told German companies to act with confidence in the Chinese market. He said he was struck by how highly Germany and its technology are still regarded there. He brought no companies with him, since the trip is meant to focus on culture and science, yet the first day centered on the economy. He visited the Volkswagen China Technology Company, a research center for electric mobility that opened about three years ago and now employs 3,000 people.

Steinmeier also voiced concern about the imbalance. He said China's growing trade surplus worries Europe because the successful model of cooperation is becoming lopsided, and that the aim must be to keep cooperation going for both sides' benefit. Germany's deficit with China was just under €90 billion in 2025: China sold €170.6 billion of goods to Germany, while German exports to China came to €81.3 billion, according to the Federal Statistical Office. Across the EU, EU Trade Commissioner Maros Sefcovic put the deficit at almost €197 billion for the first half of 2026. Lawmaker Johannes Volkmann, traveling with Steinmeier, warned Germany against losing its innovation leadership and against letting innovation and value creation happen only outside Europe.

Carmakers are feeling the pressure directly. Mercedes-Benz cut its 2026 forecast on Tuesday, citing difficult conditions in China and higher fourth-quarter costs. It now expects an adjusted car profit margin of 2% to 3%, down from 3% to 5%. Its shares fell 3.4% in morning trading. It is the third big German automaker to lower its outlook this year, after BMW and VW. Mercedes deliveries in China, already at their lowest since 2016 last year, fell another 29% in the nine months to September. Preliminary third-quarter figures showed free cash flow of €172 million from the vehicle business, against €422 million expected by analysts. Operating profit was €1.77 billion, more than double last year's €750 million, though that year was distorted by job cut and legal costs. The adjusted car margin was 2.5%, versus 4.8% a year earlier. CEO Ola Kaellenius has asked German employees to work more without pay while the company expands in Hungary, where he says costs are about 70% lower.

On security, Defense Minister Boris Pistorius joined his counterparts from France, Italy, Poland and the UK in an op-ed, published online and in Tuesday's Tagesspiegel, that called Russia the most acute and long-term threat to Euro-Atlantic security. They said they aim for "a stronger Europe within a stronger NATO" while describing the United States as an indispensable ally. The message lands amid European wariness over Trump's commitment to NATO, including his threats to leave the alliance and to seize Greenland, which belongs to Denmark. The five ministers also reaffirmed political, military and financial support for Ukraine.

Courts and agencies produced other news. A Hamburg court rejected a defense request to end the trial of Serhii Kuznietsov, 50, a former Ukrainian army officer accused of leading the sabotage of the Nord Stream pipelines on September 26, 2022, with six others. His lawyers argued he could not speak without risking penalties in Ukraine. The court said German law does not limit his defense that way. Zelenskyy has denied Ukrainian involvement. In Munich, a court set Beate Zschäpe's minimum term at 24 years, keeping her in prison until at least 2035, though the ruling can be appealed. And the BGE nuclear waste agency narrowed its search for a final repository to 5% of Germany, down from 25%, and aims to propose sites by the end of 2027.

What to watch next is Merz's stops in Japan and South Korea, and whether the European defense and trade pledges turn into concrete measures.