Germany's top U.S. business lobbyist warned Friday that protectionist policies in the United State could harm both countries and its Economy Minister suggested the government could take legal action if border taxes are put in place by President Donald Trump.
The rhetoric comes shortly before a delayed meeting in Washington between Trump and Germany's Chancellor, Angela Merkel, where the two leaders are expected to talk trade, climate change and European security. It also follows reports that G20 Finance Ministers and central bankers meeting in Baden-Baden will drop a long-standing reference to free trade and open markets when they issue their draft communique this weekend.
"We call on those responsible to do everything possible to avoid a standstill or even a worsening of our trade relations," wrote Bernhard Mattes, president of the American Chamber of Commerce in Germany in an op-ed published Friday. "In a trade war, there can be no winners as the global economy is too networked and our supply chains too international."
Reuters said the G20 communique, which has traditionally emphasized free trade and cautioned against protectionism, has instead focused on foreign exchange markets and competitive devaluations by governments in order to gain export advantage over international rivals.
"There are differing views on this subject," Germany's Finance Minister Wolfgang Schaeuble said, according to Reuters. "It's possible that we explicitly exclude the topic of trade in Baden-Baden and say that can only be resolved at the summit of the state and government leaders."
Last month, Trump's senior economic adviser, Peter Navarro, said Germany, which has a €50 billion ($53.7 billion) trade surplus with the United States, was using a "grossly undervalued" euro to gain competitive advantage in export markets and accused Europe's biggest economy of being a currency manipulator.
Earlier Friday, Economy Minister Brigitte Zypries told Germany's' Deutschlandfunk radio that Trump's aim to apply a 35% tax on cars manufactured in Mexico and imported into the United States could elicit a reaction from the German government via the World Trade Organisation.
"There are procedures laid out there because in the WTO agreements it is clearly laid out that you're not allowed to take more than 2.5% taxes on imports of cars," Zypries said.