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Abu Dhabi, UAEThursday 21 June 2018

Germany's Merkel increases pressure for US to ease tariffs

Peter Altmaier, Germany’s economy minister, in first visit to US since President Donald Trump announced plans to levy tariffs on steel and aluminium

German Chancellor Angela Merkel has sent a close ally to the US to push for relief over steel and aluminium levies. Michael Sohn/AP
German Chancellor Angela Merkel has sent a close ally to the US to push for relief over steel and aluminium levies. Michael Sohn/AP

German Chancellor Angela Merkel is intensifying efforts to thwart a trade war with the US, sending a close ally to Washington for critical talks aimed at defusing a tit-for-tat on tariffs that could undermine the European country’s export-driven economy.

Peter Altmaier, Germany’s economy minister and a long-time confidante of Mrs Merkel, headed to Washington Sunday for discussions this week with Commerce Secretary Wilbur Ross and “anyone in Washington who is willing to talk” he said in an interview with public broadcaster ARD.

“What’s dangerous about the current situation is that it threatens a spiral of one-sided measures that contradict the idea of free trade,” Mr Altmaier said. “That would counter what we’ve done for the past 60 years and that’s why we need to talk.”

The trip marks the first high-level talks between the US and Germany since President Donald Trump announced plans to levy tariffs on steel and aluminium earlier this month, sparking threats of retaliation by the EU. Germany’s export strength has been a frequent target of Mr Trump’s ire over US trade imbalances.

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Mr Altmaier’s trip is a sign that Mrs Merkel’s response is gathering momentum after drawn-out efforts to build a governing coalition ended last week with her inauguration to a historic fourth term. While Mr Altmaier is US-bound, German Finance Minister Olaf Scholz is meeting his American counterpart Steven Mnuchin at a gathering of G20 finance chiefs in Buenos Aires to lobby for free trade.

“We must think about how we can ensure growth for the future and of course also how we can keep one of the most important resources for future wealth - the possibility to trade freely - stable,” Mr Scholz told reporters. Free trade benefits many countries “and that’s why it would be difficult if protectionism played a bigger role now again.”

Mrs Merkel on Saturday spoke with Chinese President Xi Jinping and the two leaders discussed deeper relations, according to a statement by the chancellery. The prospect of closer ties between Germany and China could prod the US to ease up on its European ally. Both countries need each other to thwart China’s growing economic and political influence. On Sunday, a top US official broke off economic talks with Beijing, a renewed sign of tension ahead of the G20 meeting in the Argentine capital.

Still, given the complexity of the situation, Mr Altmaier expressed doubt that concrete results could be reached in talks this week. He did, however, offer an olive branch to Mr Trump, who has targeted Germany for not doing its fair share in Nato.

Germany’s new government is committed to increasing defence spending toward the level of 2 per cent of gross domestic product as called for by the security alliance, Mr Altmaier said, adding that the country plans to move toward this level by 2024.

“Americans are still our allies,” he said. “I want to prevent that we get into a trade war.”