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Germany’s hefty trade surplus is not something the country can address on its own, its finance minister said in the wake of aggressive noises about the two countries’ trading relationship from within the Trump administration.
Speaking after meetings with his US counterpart in Berlin, Wolfgang Schaeuble said that one of the reasons for Germany’s surplus was that the country doesn’t have its own currency and is not in charge of its monetary policy, adding that his country was doing its “homework” and that there was a broader need to stimulate growth within the euro area.
Germany has come under fire for its external surplus with the US from Peter Navarro, Donald Trump’s trade adviser, in words that created a tense backdrop to the two finance ministers’ talks. Speaking alongside Mr Schaeuble, US Treasury Secretary Steven Mnuchin said it was not America’s desire to get into “trade wars” but that it wanted to deal with “imbalances” in trading relationships.
Finance ministers are due to convene further south in Baden-Baden on Friday and Saturday to hold their first G20 gathering since Mr Mnuchin was confirmed as Treasury Secretary. The meetings come at a point of high anxiety about the Trump administration’s sceptical stance on globalisation and international trade, with officials squabbling during the week over standard anti-protectionism wording in drafts of the communique that will be released on Saturday.
Mr Mnuchin and Mr Schaeuble stressed they had held constructive talks, with the US treasury secretary saying both sides had agreed “it is important for the US to play an essential leadership role towards global economic growth.”
But Mr Schaeuble commented that the issue of Germany’s external surplus was “more complex than some people think” and the solution lies within the euro area as a whole.
Mr Mnuchin struck a largely conciliatory note in his comments. Asked about plans from congressional Republicans for a border-adjusted tax on US companies – a measure that has worried American trading partners who think it would put them at a disadvantage – Mr Mnuchin said the Trump administration had not yet made any decisions on which way to go with the proposal.
He also reiterated recent language commenting that the strengthening of the dollar was in the long-term best interest of the US, a comment that is in line with US Treasury orthodoxy in recent decades.