Germany Will Safeguard Free Trade

Protectionism is the wrong answer to the challenges facing the world, and Germany must fight to safeguard free trade, which guarantees wealth and prosperity for all, the German government, industry groups and unions say.

In a joint statement published in Berlin, Economy Minister Brigitte Zypries, IG Metall union head Joerg Hofmann and BDI industry association President Dieter Kempf said prosperity depended on open markets and open societies, and not only in Germany, Reuters reported.

“Striving for political and economic protectionism is the wrong way,” they said. 

Now more than ever, Germany and its European partners must make the case for an open and fair trading system, the group said. They urged Germany to use the G20 presidency to combat political intervention aimed at supporting national industries.

Germany wants to deal with the new US administration with a mixture of self-confidence and readiness to talk, Zypries said at an industry conference in Berlin.

“We will not break our principles,” Zypries said. But if the US is serious about protectionist measures, “then one must counter them,” she said.

US President Donald Trump has threatened German car companies with a border tax of 35% on vehicles imported to the US, arguing that would make them create more jobs on American soil.

Trump’s top trade adviser has also accused Germany of using a “grossly undervalued” euro to gain advantage over the US and its own EU partners—a claim rebutted by German Chancellor Angela Merkel, who has said the European Central Bank is in charge of the euro.

The head of the BGA trade association, Anton Boerner, said on Tuesday that Trump’s first actions in office were “alarming” and that his protectionist threats posed a risk to both the US and German economies.

Boerner also warned that it could trigger a global recession, dpa reported. 

“By winning the election, Donald Trump has now got his dream business and sees the US as his company,” he said. 

“If the US president’s ideas for new trade barriers were to be implemented, in particular against China, it would have a catastrophic effect on the export-oriented German economy as well as for our country,” Boerner said. As a result, a global recession would be inevitable, he said.

Boerner indicated that Germany should consider new alliances with nations in Asia, Latin America and Canada to offset the negative effect resulting from Trump’s policies. “We must be hard and self-assured, which is the only thing that impresses Trump the entrepreneur,” he added.