One year into the presidency of Donald Trump, the Federation of German Industries (BDI) is still not sounding the all-clear. “Our worst fears have not materialised but German industry remains very concerned,” said BDI President Dieter Kempf in Berlin ahead of the first anniversary of Trump’s inauguration as president.
“Our companies are worried about the substantial rise in the use of unjustified anti-dumping measures by the US,” said Kempf. He added that the brunt of these new trade barriers is felt not by China but by other trade partners such as Germany.
With the tax reform behind him, Trump can focus more on trade policy this year, said Kempf. If the US president sticks to his electoral pledge to take a stronger stance against trade partners like China to protect US industry, negative consequences are to be expected. “An escalating trade dispute with China would have dramatic consequences for Europe as well. A withdrawal of the US from the Nafta trade agreement would severely hit German companies operating in the region,” warned the BDI president.
“Protectionism is ultimately bad for all sides, including the US. The future German government must take a clear stance against overt and hidden protectionism,” urged Kempf. He went on to advocate rule-based trade and EU free trade agreements with strategic partners.
The economic policy of the US president has so far failed to provide the urgently needed investments in infrastructure. The US tax reform will step up tax competition enormously. “The German government must now respond with structural tax reforms to ensure that Germany remains competitive as a business location,” emphasised the BDI president.