German Finance Minister Christian Lindner (not pictured) speaks with U.S. Treasury Secretary Janet Yellen during the IMF and World Bank Annual Meetings in Washington, DC, USA on Thursday, October 24, 2024. .
Ting Sheng | Bloomberg | Getty Images
German Finance Minister Christian Lindner warned on Friday that there could be retaliation if the United States starts a trade war with the European Union.
“In trade disputes, there are never winners, only losers,” Lindner told CNBC’s Karen Tso on the sidelines of the International Monetary Fund’s annual meeting in Washington, DC.
Lindner suggested that an important question is what will happen to U.S. trade policy if Donald Trump is elected president. “In that case, we will need diplomatic efforts to convince whoever is in the White House that it is not in the best interest of the United States to have a trade conflict with the European Union. We will also need to consider retaliation.” said. Lindner is currently a member of the pro-business Liberal Democratic Party, which is in coalition with Chancellor Olaf Scholz's Social Democratic Party.
Lindner said America’s problems with trade lie with China, not the EU, adding that the EU “should not be a negative side effect” of the U.S.-China dispute.
President Trump has floated the idea that, if elected, he could impose blanket tariffs of 10% to 20% on nearly all imports, regardless of where they come from.
Reuters reported on Thursday, citing a study by Germany’s economic institute IW, that if the U.S. implemented such 20% tariffs, the gross domestic product (GDP) of the EU and Germany would decline in the coming years. It was reported that he was deaf. Trade is one of the main pillars of Germany’s economy, suggesting rising tensions, uncertainty and tariffs will hit it harder than other countries.
Earlier this month, the German statistical agency Destatis announced that the United States is becoming increasingly important as a trading partner for Germany. The agency said that since 2021, the United States has been Germany’s second most important trading partner after China, but in the first half of 2024, the value of external trade with the United States exceeded that with China. According to Destatis, around 9.9% of Germany’s exports went to the US in 2023.
Trade tensions between the US and China and the EU and China have been increasing throughout the year. The United States and the European Union have imposed additional tariffs on some imports from China, citing unfair trade practices.
Meanwhile, China also announced a temporary increase in tariffs on some imports from the EU. As retaliatory measures continue, several investigations and investigations into mutual competition, subsidies, and other practices are also ongoing.
Germany’s Lindner appealed to the EU not to start a trade war after the EU voted to impose tariffs on Chinese-made electric cars. Germany had previously argued against higher tariffs, raising concerns about how they would affect the country’s struggling automakers.
Earlier this week, International Monetary Fund Deputy Managing Director Gita Gopinath told CNBC that escalating trade and tariff tensions between the U.S. and China will have “a cost for everyone.”
