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Germany says U.S. under Trump must abide by trade deals

Published 20/01/2017, 11:13
© Reuters. German Finance Minister Schaeuble attends the WEF annual meeting in Davos

BERLIN (Reuters) - Washington must stick to international agreements under the presidency of Donald Trump, German Finance Minister Wolfgang Schaeuble said on Friday, but does not expect a major trade war despite the President-elect's attack on German car makers.

Trump - now hours away from his inauguration - has vowed to make sweeping changes to U.S. trade policy, and economists see his protectionism as the biggest risk to U.S. growth.

"The United States also signed international agreements," Schaeuble told magazine Der Spiegel.

"I don't think a big trade war will break out tomorrow, but we will naturally insist that agreements are upheld," he said.

Trump criticised German auto makers this week for failing to produce more cars in the U.S. and warned that he would impose a tax of 35 percent on vehicle imports.

U.S. companies employ more than 600,000 people in Germany, the United States' biggest European trading partner, and German firms employ roughly the same number in the U.S.

Schaeuble said he wished Trump luck if he wanted to tell Americans which cars to buy. "That's not my vision of America and I don't think it's his either," he said.

He also recommended not taking Trump's practise of tweeting policy changes too seriously.

"One shouldn't confuse Trump's form of communication with statements of government policy. We will not participate in that," he said.

Trump has triggered concern across German industry.

"Protectionism will not secure jobs in the medium- to long-term," Dennis Snower, president of the Institute of World Economy, said in a statement.

"Trump is making foreigners the scapegoat for the fact that the American dream of pulling yourself up by your bootstraps isn't working anymore."

Marcel Fratzscher, head of the DIW economic institute, said Trump's protectionism would not bring any jobs back to the U.S.

"On the contrary, he will destroy even more jobs," he told German broadcaster MDR.

The American Chamber of Commerce in Germany also urged Trump to stick to free trade agreements, underscoring the importance of U.S.-German trade relations.

© Reuters. German Finance Minister Schaeuble attends the WEF annual meeting in Davos

"Protectionist measures like tariffs and or the cancellation of international trade agreements have no place in a globalised world," said the group's president, Bernhard Mattes.

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