BERLIN: German conservatives under Friedrich Merz clinched a coalition deal with the centre-left Social Democrats (SPD) on Wednesday, aiming to revive growth in Europe`s largest economy just as a global trade war threatens recession.

The deal caps weeks of haggling between chancellorin-waiting Merz and the SPD after he topped elections in February but fell well short of a majority, with the farright Alternative for Germany surging into second place.

Pressure to reach a deal has taken on new urgency as the government will take charge at a time of global turbulence in an escalating trade conflict sparked by US President Donald Trump`s sweeping import tariffs.

With the AfD breathing down its neck, the coalition signalled a tougher stance on migration, planning to turn away asylum seekers at Germany`s borders and scrap fast-tracked naturalisation, among other measures.

The tougher stance on migration explicitly moves Germany away from a more liberal policy under Merz`s conservative predecessor Angela Merkel during the 2015 European migrant crisis.

During a news conference with his coalition partners, Merz directed a message to the White House in English.

`The key message to Donald Trump is Germany is back on track,` he said, promising to ramp up defence spending and boost the competitiveness of the economy.

He said the coalition pact provided a `strong and clear signal` both to its own citizens and other European countries, adding, `Germany is getting a government that is capable of action and strong.` The deal stressed the importance of Germany`s relations with the United States, its largest trading partner, and aims for a free trade deal in the medium term. But Merz also emphasised that the European Union needed a common response to the escalating global tariff war that has put the US and China in particular at loggerheads.-Reuters