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Germany sees no quick solution to trade row with U.S., open to talks

Reuters  |  BERLIN 

By Joseph and Paul Carrel

BERLIN (Reuters) - sees no to the trade dispute between the and other major economies but remains open to talks "among friends", said on Monday, seeking to head off a full-blown global trade war.

U.S. backed out of a joint communique agreed by leaders in at the weekend that mentioned the need for "free, fair and mutually beneficial trade" and the importance of fighting protectionism.

Trump, who has imposed import tariffs on metals, is furious about the United States' large trade deficit with key allies. "Fair trade is now to be called fool trade if it is not reciprocal," he tweeted on Monday.

As Europe's biggest exporter to the and with more than one million German jobs at stake, is desperate to avoid an EU trade war with the

"I believe a win-win situation is still possible," Peter Altmaier, one of Angela Merkel's closest lieutenants, told broadcaster Deutschlandfunk.

"At the moment, however, it seems that no solution is in sight, at least not in the short term... We have not made any progress in the last few days, but rather, as we saw with the rejection of the summit declaration, we have gone backwards."

Merkel said on Sunday the EU would implement counter-measures against U.S. tariffs and described Trump's rejection of the communique as "sobering and a bit depressing".

Investors are fearful of a tit-for-tat trade war, though markets were relatively calm on Monday after an early wobble.

"The American withdrawal from the communique has increased the risk of a real trade war," ING, a bank, wrote in a research note.

GERMAN EXPORTS

In 2017 German exports to the United States reached 112 billion euros ($132.04 billion), more than twice the next biggest EU country, Britain, Eurostat statistics office data shows.

Particularly concerning for Germany, a major to the United States, is Trump's weekend tweet that is looking at tariffs on automobiles.

Altmaier said must act "in a united manner", defend open markets, and stick to its convictions. Fractures in the European position would play into Trump's hands, he added.

"We are ready to talk about trade imbalances. But we think it has to be done among friends and partners and not in mutual confrontation," Altmaier said.

"The American economy is dependent in many areas on the import of European goods. As tariffs increase, so does the cost of production in the United States."

The European Commission, which coordinates trade policy for the 28-member EU, aims to target 2.8 billion euros worth of U.S. imports, including bourbon and jeans, with additional 25 percent duties, from early July.

It already has broad backing from EU member states, but still needs to consult with them in the next couple of weeks.

Jean-Claude Juncker, while questioning whether the United States was truly an ally, said the bloc did not want to stop talking with

"We do not want to cut off discussions and further talks will of course need to address the automobile sector," he said.

($1 = 0.8482 euros)

(Additional reporting by Philip Blenkinsop in Brussels; Editing by Gareth Jones)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, June 11 2018. 16:53 IST
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