German Finance Minister Christian Lindner meets with US Treasury Secretary Janet Yellen at the annual meetings of the International Monetary Fund and the World Bank in Washington, USA, on Thursday, October 24, 2024 (Not in photo).
Shen Ting | Bloomberg | Getty Images
German Finance Minister Christian Lindner warned on Friday of possible retaliation if the United States launched a trade war with the European Union.
“There are never winners in trade disputes, only losers,” Lindner told CNBC’s Karen Tso on the sidelines of the International Monetary Fund’s annual meeting in Washington, D.C.
Lindner said a key question is what U.S. trade policy would look like if Donald Trump were elected president. “In this case, we need to use diplomacy to convince the people in the White House that a trade conflict with the EU is not in the best interests of the United States. We will have to consider retaliation,” he said. Lindner belongs to the pro-business Free Democrats, which is currently in alliance with Chancellor Olaf Scholz’s Social Democrats.
Lindner said the U.S. trade problem lies with China, not the EU, adding that the EU “should not be a negative influence” on the U.S.-China dispute.
Trump has floated the idea that, if elected, he would impose blanket tariffs of 10% to 20% on nearly all imported products, regardless of where they come from.
Reuters said that if the United States implements 20% tariffs, the gross domestic product of the European Union and Germany will decline in the next few years. report Thursday cited a study by the German economic research institute IW. Trade is one of the main pillars of the German economy, suggesting rising tensions, uncertainty and tariffs will hit Germany harder than other countries.
Earlier this month, the German statistics office Destatis explain The importance of the United States as Germany’s trading partner has been growing. The agency stated that since 2021, the United States has been Germany’s second largest trading partner, second only to China, but in the first half of 2024, the foreign trade volume with the United States was higher than the foreign trade volume with China. According to Destatis, about 9.9% of Germany’s exports will be sold to the United States in 2023.
Trade tensions between the United States and China, and the European Union and China, have increased throughout the year. Both the United States and the European Union have imposed higher tariffs on some goods imported from China, citing unfair trade practices.
China also announced higher temporary tariffs Some imported products from EU. As the tit-for-tat measures continue, so do multiple inquiries and investigations into one another’s competition, subsidies and other practices.
Germany’s Lindner urged the EU not to start a trade war after the EU voted to impose tariffs on Chinese-made electric cars. Germany has previously argued against higher tariffs, raising concerns about what they would mean for its struggling automakers.
Earlier this week, International Monetary Fund Deputy Managing Director Gita Gopinath told CNBC that escalating trade and tariff tensions between the United States and China will “cost everyone.”
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