Donald
Trump’s proposal to tax imports may lead to litigation at the World
Trade Organization, according to German Economy Minister Brigitte
Zypries.
The threat
comes ahead of the first meeting of between Chancellor Angela Merkel
and the US President on Friday.
Trump has
warned the US would impose a 35 percent border tax on BMW vehicles,
produced at a new plant in Mexico.
“I'm
betting partly on reason and partly on the courts” to stop a
damaging trade war, said Zypries in an interview with Deutschlandfunk
public radio, Friday. “The other option is that we file a suit
against him at the WTO - there are procedures laid out there because
in the WTO agreements it is clearly laid out that you're not allowed
to take more than 2.5 percent taxes on imports of cars,” the
minister said.
The US
became Germany's biggest export market last year, selling €107
billion of goods while importing just €58 billion worth. Germany’s
trade surplus has been a source of tension between Washington and
Berlin.
“We
know ourselves that that's a problem and we're working on it.
Thankfully we just heard today that wage rises have been agreed again
so that means domestic demand can increase again and we want to
address tax incentives for research... so we're on a good path,”
Zypries said.
Nearly
72,000 steel workers in northwestern Germany will get a 2.3 percent
wage increase starting April and a rise of 1.7 percent from May 1,
2018, according to the employers’ association for the German steel
industry Arbeitgeberverband Stahl.
“The
Americans need our machines and our plants, and the other point is
that we only have an export surplus in the machines and plants
sector; in the service sector it's the other way around, due to big
internet companies in the United States,” said Zypries.
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