Obama jetted into the northern city of Hanover greeted by an early spring mix of sun and hail for a final official visit to Europe's biggest economy.
One of the headline goals of the trip is to advance negotiations on what could become the world's biggest free trade agreement, the Trans-Atlantic Trade and Investment Partnership (TTIP).
Both sides say they aim to see it finalised, at least in its broad outlines, before Obama leaves office in January.
"The Americans want to hold fast to their 'Buy American' idea. We can't accept that. They don't want to open their public tenders to European companies. For me, that goes against free trade," Gabriel, a Social Democrat who is also Germany's deputy chancellor, told business newspaper Handelsblatt.
His comments came a day after tens of thousands of people marched against the US-EU free trade deal through the streets of Hanover, where Obama and Merkel are to open what is billed as the world's largest industrial technology fair today night.
Both have an approach to politics that is heavily analytical, leading aides to talk about a relationship that is cerebral and without comparison.
"I consider Angela one of my closest partners and also a friend," Obama told the Bild newspaper, laying on the compliments on the eve of his trip.
"I've worked with her longer and closer than any other world leader, and over the years I've learned from her," he said.
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