Trump’s hatred for Germany could see extra tariffs impose to crush ‘parasite’ economy
The home of Mercedes-Benz, BMW and Porsche made a surplus of 22 billion euros (£19.73billion) in automative trade with the US last year, according to the Federal Statistics Office. Cars are an important export for Germany, which is Europe’s largest economy. But if the US President decides on permanent tariffs of 25 percent, German car exports to the US may fall by 50 percent.
Financial trade expert André Wolf warned Mr Trump views Germany as a “parasite” due to its trade surpluses.
A trade surplus arises when a country’s exports during a given period are larger than its imports.
Last year, Germany imported only 5.2 billion euros of equivalent US goods.
The head of the Research Divisions Global Economics, Business Cycle and International Trade at the Hamburg Institute of International Economics, warned Berlin’s “Made in Germany” ethos means other countries are struggling to compete, including France and the US.
He told Finanzen100: “For a long time, trade surpluses have been criticised internationally.
“Economists have seen it for years, because the goods side of the export must be financed by capital.
“Specifically, this means that foreign countries are indebted to us with their imports.
“While this sounds good, it is a risk factor for the stability of the entire global economy. The loans have to be ‘repaid’.”
He added: “In Mr Trump’s protectionist view, Germany is a parasite.
“In particular, the German car industry is a thorn in his side.
“And this is a good populist goal for voters in regions of the formerly strong steel and auto industry around Chicago and Detroit Rust Belt for his 2020 election campaign. Deindustrialisation took place here for decades.
“It’s a good idea to set fire under the kettle of the ‘export world champion’.”
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