Merkel’s ally vows tit-for-tat moves against US

BERLIN: Europe should impose punitive tariffs on imports from the US if President Donald Trump acts to shield US industries from foreign competitors, a senior ally of German Chancellor Angela Merkel said in a newspaper interview.
Trump has already formally withdrawn the US from the Trans-Pacific Partnership (TPP) trade deal, distancing America from its Asian allies and vowed to renegotiate the US free-trade deal with Canada and Mexico.
The tycoon-turned-president has also threatened German carmakers with a border tax of 35 percent on vehicles imported into the US market, saying such a levy would help create more jobs on American soil.
“If Donald Trump imposes punitive tariffs on German and European products, then Europe should also impose punitive tariffs on US products,” Volker Kauder, parliamentary floor leader of Merkel’s conservatives, told the Funke media group in an interview published on Saturday.
“We cannot accept everything,” Kauder added.
He said German officials would have to remind “our friends in Washington” that trade wars in the past had already shown that both sides only lost from such measures.
“We just have to say calmly and with self-confidence: If Trump carries out what he said, then Europe must react,” Kauder said.
The German government has vowed to protect global free trade after Trump threatened protectionist measures and his top adviser on trade accused Germany of exploiting a weak euro to boost exports.
German Vice Chancellor Sigmar Gabriel has suggested that the EU should refocus its economic policy toward Asia, should the Trump administration pursue protectionism.
In a sign of already shifting trade flows, China became Germany’s most important trading partner for the first time in 2016, overtaking the US, which fell back to third place behind France, data showed on Friday.