Germany Considers Economic Retaliation Against Trump

Caption: German Finance Minister Wolfgang Schäuble (Sean Gallup/Getty Images)

 

If America unleashes a trade war starting with BMW, Germany is prepared to fight back.

Senior German politicians have threatened to unleash a trade war on the United States if President Donald Trump follows through his threats to German industry.

President Donald Trump famously threatened to put a 35 percent tax on the German car manufacturer BMW in an interview published by the Times of London and Bild on January 15. German politicians were quick to respond. The next day, German public broadcaster ZDF asked German Finance Minister Wolfgang Schäuble if the world is entering a time of more protectionism. Schäuble said he hoped not but also pointed out one way Germany could hit back.

“I also want to point out that currently American companies don’t have to tax their gains which they make outside of the U.S.,” he said. “That means that hundreds of billions of untaxed gains, of great American companies, rest in a tax oasis” (Trumpet translation throughout).

The Scramble for Africa

BERLIN(Own report) – German businesses are demanding that the government intensify its support for tapping the “continent of opportunity, Africa” in competition with China and other BRICS countries. Parallel to the West’s waning global influence, German businesses are loosing ground on the African continent. This is why German enterprises are pushing for increasing Hermes trade credit insurances, double taxation treaties, and generally “stronger political support for the German industry in Africa.” A building industry federation is explicitly demanding that future allocations of development funds be tied to orders for German/European firms. The German government has indicated its readiness to implement these policies. The KfW Development Bank and other public-sector banks are already seeking ways to support the German industry’s expansion efforts by expanding credit transactions.

Conflict over Natural Resources

BERLIN/LIMA (Own report) – The Catholic relief organization Misereor is sharply criticizing the new “Raw Materials Partnership” accord, concluded between the Federal Republic of Germany and Peru. Misereor writes that it fears “an aggravation” of the already growing “social conflicts developing around mining projects” in this South American country. This recently signed raw materials treaty grants German companies privileged access to Peru’s resources. The German government has now “signaled the Peruvian government” that “the expansion of the raw materials sector takes priority” over social and ecological regulations affecting that sector. The “raw materials partnership” is one of the measures Berlin is implementing within the framework of its “raw materials strategy” adopted in 2010, to be able to stand its ground in the global competition for access to the most important natural resources – particularly in relationship to China. Peru is an important source of metallic raw materials for Germany. The guarantee of raw materials is more important to Berlin than Misereor’s misgivings.