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Germany sees 'non-confrontational solution' with Trump on trade
April 21, 2017 / 2:03 PM / 7 months ago

Germany sees 'non-confrontational solution' with Trump on trade

WASHINGTON (Reuters) - Germany’s finance minister is optimistic about reaching a “non-confrontational solution” on trade with the United States at a summit this summer, he said on Friday after meeting his U.S. counterpart in Washington.

FILE PHOTO: German Finance Minister Wolfgang Schaeuble talks to reporters in Baden-Baden, Germany, March 17, 2017. REUTERS/Kai Pfaffenbach

The Trump administration has threatened to impose measures to restrict imports, including of steel, and verbally attacked Germany for running a large trade surplus with the United States and benefiting from a weak euro.

Yet, confirming early signs of a detente, German Finance Minister Wolfgang Schaeuble said neither topic was discussed in Washington, where world leaders are gathering for the spring meetings of the International Monetary Fund and World Bank.

He added that he had seen a relaxation in the dispute with the United States over trade and believed a “non-confrontational solution” would be reached when financial leaders of the world’s 20 top economies meet again in Hamburg in July under Germany’s presidency.

G20 members are also meeting in Washington this week.

At a G20 meeting last month policymakers dropped a pledge to keep global trade free and open from their communique, acquiescing to U.S. requests.

Yet a few weeks later, the climate seems to be changing slightly and officials gathering in Washington have found that President Donald Trump’s administration is far from the disruptive force that he had promised during his 2016 election campaign.

But steel, of which Germany is a large producer, remains a bone of contention.

Speaking at a separate G20 event in Germany, the country’s economics minister, Brigitte Zypries, said a U.S. probe into whether imports of foreign-made steel were hurting national security pointed towards “unwelcome protectionist tendencies.”

She said she would discuss the global steel market with U.S. Commerce Secretary Wilbur Ross by telephone next week.

Although Trump’s threat to roll back some of the financial rules put into place since the 2008 financial crisis also have unnerved European regulators, the head of Germany’s central bank said there had been no discussion of the issue.

“The question of a regulatory race to the bottom ... has played and, I believe, will play no role,” Bundesbank President Jens Weidmann said, speaking alongside Schaeuble.

FRENCH ELECTION

Schaeuble added that the outcome of the presidential election in France, where a first round takes place this weekend, posed a risk to the global economy.

He said he hoped that a runoff between the leading far-right and far-left candidates - Marine Le Pen and Jean-Luc Melenchon - could be avoided. Both Le Pen and Melenchon have raised the prospect of a French exit from the European Union.

“It is no secret that we will not be cheering madly should Sunday’s result produce a second round between Le Pen and Melenchon,” Schaeuble said.

“Political movements also belong to geo-political risks. I have big confidence in the republican rationality of the French”.

Opinion polls have for months forecast that Le Pen would make it through to the run-off but then lose in the final stage.

Weidmann added that the European Central Bank was prepared for any scenario, but he underscored that it was a political, rather than monetary, question.

Additional reporting by Rene Wagner, Tom Kaeckenhoff and Joseph Nasr; Editing by Andrea Shalal, Andrea Ricci and Paul Simao

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