Ger­many warns of trade war

US stance causes di­vi­sions

The Star Early Edition - - INTERNATIONAL - Ger­not Heller

US PRES­I­DENT Don­ald Trump’s pro­tec­tion­ist ap­proach to trade has the po­ten­tial to ig­nite a trade war, the Ger­man DIHK Cham­bers of Com­merce warned yes­ter­day, adding that Ger­man com­pa­nies were among the big­gest job cre­ators in Amer­ica.

Ger­many is con­cerned that the US ad­min­is­tra­tion’s push to fix the causes of US trade deficits and to clamp down on coun­tries that abuse trade rules could hurt its ex­porters.

“We live in a world where a trade war can­not be ruled out,” said Volker Treier, who heads DIHK’s for­eign trade unit.

Di­vi­sions on trade are ex­pected to cloud the G20 sum­mit that Chan­cel­lor An­gela Merkel will host in Ham­burg this week, at­tended by Trump and Pres­i­dent Xi Jin­ping of China, whose cheap steel ex­ports the US ad­min­is­tra­tion wants to tar­get.

US of­fi­cials have lamented their coun­try’s trade deficit with the EU which has nearly dou­bled in the past 10 years from some €28.8 bil­lion in 2006 to €49bn in 2016.

Trump has warned he will im­pose a bor­der tax of 35 per­cent on cars that Ger­man car­maker BMW plans to build at a new plant in Mex­ico for ex­port to the US mar­ket.

Merkel has said she would seek a com­pro­mise with Trump on trade, but ma­jor dif­fer­ences re­main, no­tably over Trump’s de­ci­sion to with­draw from the land­mark 2015 Paris global agree­ment to fight cli­mate change.

DIHK said yes­ter­day that a record high of 50 per­cent of the 4 000 firms op­er­at­ing abroad named po­lit­i­cal risks as a top threat to their busi­ness over the next 12 months in a new sur­vey. Bri­tain’s di­vorce ne­go­ti­a­tions with the EU, US trade poli­cies and pro­tec­tion­ism were seen as ma­jor risks.

Still, some 56 per­cent said they ex­pected bet­ter busi­ness over the next 12 months and more than a third said they ex­pect the economies in their host coun­tries to im­prove.

DIHK’s Treier said Ger­man com­pa­nies are ex­pected to cre­ate 200 000 jobs abroad this year, in­clud­ing 40 000 in the US. – Reuters

A worker hangs a ban­ner with the text “Ham­burg Ahoy! Keep Global Trade Open!”, for the lob­by­ist or­gan­i­sa­tion “Ini­tia­tive Neue Mark­twirtschaft” in prepa­ra­tion for the up­com­ing G20 sum­mit in Ham­burg, Ger­many, yes­ter­day. PHOTO: EPA

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