Berlin
prepares for Trump’s wrath
German
deputy finance minister warns country may be next on
president-elect’s trade hit-list.
By JANOSCH
DELCKER 1/19/17, 5:25 AM CET
BERLIN – Germany
may be next on Donald Trump’s hit list.
For months, the
president-elect has railed against Mexico and China over what he
describes as unfair trade practices.
Now, German
officials are preparing for the wrath they believe is coming their
way.
“The main focus of
the debate is on Mexico and China. But when it comes to the issue of
a trade surplus, Japan and Germany are the next countries on the
list,” German Deputy Finance Minister Jens Spahn told POLITICO,
following a series of unofficial meetings with members of Trump’s
transition team in New York and Washington.
Ahead of Trump’s
inauguration Friday, Spahn traveled to the U.S. last week for a
series of informal talks with Trump allies, including Peter Navarro,
the head of Trump’s newly formed White House National Trade
Council.
During those talks,
Spahn said he stressed that Germany’s massive trade surplus was not
a strategy to support the German economy on the backs of
international partners — the line Trump has taken when arguing
against China’s trade policy.
“As we have been
trying to explain to our European partners for years, this surplus is
not a problem, but rather an advantage,” Spahn, a member of German
Chancellor Angela Merkel’s Christian Democrats (CDU,) said in an
interview at his office in the German Finance Ministry. “Considering
that, for years, this has been proven hard to explain in Brussels, we
will probably need a couple more rounds in D.C., as well.”
In April, the U.S.
put Germany on a list of countries which Washington suspects are
behaving unfairly to support their economies.
Germany exports
significantly more than it imports, which is a source of
consternation for many of its international partners, including the
United States, who in the past have criticized Berlin for taking
advantage of the trade surplus while at the same time not doing
enough to spur imports.
Instead of investing
the money they make, critics say, Germans prefer to save, preventing
the recovery of crisis-ridden eurozone countries and slowing down
global growth.
In April, the U.S.
put Germany, along with China, Taiwan, South Korea and Japan, on a
list of countries which Washington suspects are behaving unfairly to
support their economies.
Germany’s current
account surplus, a broader trade measure that includes the trade
surplus, has almost doubled over five years, from around €145
billion in 2010 to €256.1 billion in 2015. The figures for 2016
have not been released yet, but monthly reports suggest that the
surplus remains similarly high.
As Trump takes
office, many in Berlin are concerned that Germany might soon find
itself in his crosshair as China has done. But Germany doesn’t
control its economy or the markets in the way that China does, Spahn
argued.
“We need to make
clear that there is a difference between the U.S. trade deficit with
low-wage countries [like China] on the one hand, and with a high-wage
technology country like Germany on the other hand,” Spahn said. “In
the European Union, it’s the market that makes decisions at the end
of the day.”
Referring to a
recent interview with Bild, in which Trump said German cars are
ubiquitous on the streets of New York while very few American cars
are seen on German roads, Spahn said that, ultimately, it’s the
consumers who determine what gets bought, not governments.
If “BMWs or
Mercedes sells well in the U.S. while a Dodge sells rather poorly in
Europe, it’s because of decisions made by consumers, not by the
state,” he said.
Spahn’s visit to
America wasn’t only about trade — it was also about getting to
know some of the people around Trump who he and his colleagues at the
finance ministry will have to deal with once Trump becomes the 45th
president of the United States
The 36-year-old
minister, who rapidly rose through the ranks of the CDU to become
deputy finance minister within a decade, emphasized that reaching out
to the incoming administration and its staff, many of whom are
political newcomers, is a priority — especially as Germany took
over the presidency of the G20 in December.
“In light of
Germany’s G20 presidency this year, contacts with the new U.S.
administration are particularly important,” Spahn said.
Merkel intends to
use the G20 presidency to safeguard multilateral cooperation. In the
light of Trump’s election victory, however, concerns have grown in
the German capital that the international forum could lose much
importance.
Meeting with Trump’s
team, Spahn said he made it clear that for Germany, international
organizations are, at this moment in time, “crucial for promoting
dialogue and for providing a framework to coordinate” cooperation.
“If the new
American president has suggestions for how to improve this, we are
open for a conversation,” he said. However, he added, “one thing
needs to be clear: The motto ‘We don’t care about multilateral
cooperation’ is not our motto. This doesn’t solve a single
problem – quite the opposite.”
“Trump is
certainly asking justifiable questions and we need to be responsive,”
he said. “It’s true that Germany, for example, has clearly missed
the mutually agreed target of spending 2 percent of its budget on
defense to reach the target that was agreed among NATO members.”
Particularly when it
comes to Europe, it is important to seek contact with the new U.S.
president and his administration on all levels to try and reverse any
bad impressions he might have formed of the EU.
“It is not on that
Nigel Farage was the first European politician to seek talks with
him,” Spahn said, referencing to the Brexit advocate and former
UKIP leader. “This, apparently, has left a disastrous image of the
EU. All the more, we now need to make sure to tell him,
self-confidently, what the EU is actually capable of. “
Read the full
interview in English and in German.
Authors:
Janosch Delcker
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