When Had We Left The Jungle?

I wasn’t aware that we had.

Jungle

WTO Faces Existential Threat in Times of Trump -U.S. President Donald Trump has set his sights squarely on the World Trade Organization in Geneva. Even its critics are worried that without the organization, the world of trade would revert to the law of the jungle.

The U.S. and other industrialized nations made several concessions to developing economies when the WTO was founded in 1995 and significantly reduced their tariffs. In return, they were able to push through stronger protections for intellectual property. They hoped that the strategy would help slow China’s rise.

But from the U.S. perspective, the system has not been beneficial. And once China joined the WTO in 2001, that dissatisfaction only grew, partly because the Chinese proved adept at taking advantage of the rules. Even today, there is significant dissent within the WTO because the economic superpower China is still classified as a “developing nation” by the organization, which gives it certain privileges. On the other hand, China is fighting for recognition as a market economy, to which both the U.S. and the European Union are opposed because it would mean they could no longer defend themselves against state-subsidized Chinese exports with anti-dumping duties.

On top of all that, the WTO is facing a more fundamental problem: its size and its sluggishness. Negotiating rounds focused on removing tariffs have become increasingly complex. And because everything is up for negotiation at the same time, every member state can paralyze the process by simply exercising its veto. The Doha Round, launched in 2001, is a perfect example: It never achieved any results and has become symbolic of the WTO’s failure.

“The problems are coming from the behavior of a single country that would like to return to the jungle.”

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War Is Over! (f You Want It)

What? That was it? No more trade war hysteria? Just when it was starting to get interesting? What Luschen (duds).

EU

The Wall Street Journal reported that Richard Grenell, the U.S. ambassador to Germany, has been in talks recently with the chief executives of German car makers BMW, Volkswagen and Daimler, where they pitched the idea of ending car tariffs between the U.S. and the EU.

During these talks, the executives said they would be in favor of scrapping these levies as part of a broader deal encompassing industrial goods, the Journal said.

“Germany has the right approach to resolving this trade disagreement among friends.”

German Of The Day: Geschröpft

That means fleeced. Or clobbered, if you prefer.

Trump

As in… We protect Europe (which is good) at great financial loss, and then get unfairly clobbered on trade.

„Deutschland zahlt ein Prozent des Bruttoinlandsproduktes (langsam) in Richtung Nato, während wir vier Prozent von einer weit größeren Bruttoinlandsprodukt zahlen. Glaubt irgendjemand, dass das Sinn macht?“

Germany Preparing Itself To Lose The Next “Illegal” War

A Vicious Cycle – Berlin Worried about Losing Trump’s Trade War.

War

The U.S. has followed through with its threat to impose punitive tariffs on European steel and aluminum and the signs are pointing to a global trade war. The German government is doing what it can to prevent harm to its automobile industry.

… The German automotive industry would also be hard hit by a possible trade war with the U.S., where the most cars are sold in the world after China. German carmakers export around a half-million vehicles to the U.S. each year — particularly the kinds of expensive sedans that have been a thorn in Trump’s side for decades. If punitive tariffs are imposed, carmakers would likely have no choice but to react with higher prices and thus risk a decline in sales. VW subsidiary Porsche is especially at risk. Although the company sells almost a quarter of its vehicles in the country, it does not operate any factories of its own in the U.S.

“Germany stands to lose most.”

The Iran Deal Is Not Dead

It just smells funny. At least that’s what Germany seems to think.

Iran

You see, spokesmen for German industry plan to call up Donald Trump and explain to him that the “US Iran call is illegal.” Then, once they’ve straightened that up with him, everything ought to be hunky dory, right? And they can go back to getting moola from the mullahs again.

They better hurry up, though. America’s new ambassador to Germany has only been in office for twenty-four hours and already has a really bad case of ITF (Itchy Twitter Finger).

For the past year, German officials have been urging their U.S. counterparts to send a new ambassador to Berlin. But after finally receiving one, many may be having second thoughts.

Within hours of assuming his new post on Tuesday, Richard Grenell triggered harsh criticism in this Trump-weary country after appearing to threaten one of the American president’s frequent targets: German businesses.

“German companies doing business in Iran should wind down operations immediately.”

German Of The Day: Standpauke

That means lecture. And according to the Spiegel, that’s what Angela Merkel is about to get from Donald Trump.

Merkel

Well, folks. If it’s not in the Spiegel it didn’t happen. Or ain’t gonna happen, in this case. So “dress warmly,” Angela, as the German saying goes.

After Macron’s two-day Trump charm offensive, Merkel plays “bad cop” in Washington.

Angela Merkel won’t be showered with the pomp and praise that marked Emmanuel Macron’s state visit to Washington this week—let alone with any touch-feely back rubs. The German chancellor comes armed with spreadsheets, rather than Gallic charm, and has just a couple of hours to try and head off Trump’s looming aluminum-and-steel tariffs and protect German businesses.

“In Germany, every fourth job depends on exports. In the industrial sectors, it’s more than every second job.”

This Could Mean War Or Something

Tariff war. World War T. You know, the end of the world as we know it? Then it’s all over but the crying. And the Zombie Apocalypse. It’ll be  Zombie Apocalypse Now, so-to-speak.

Steel

Yawn.

Berlin holds little hope that the EU will be granted a further exemption from US metals tariffs beyond a May 1 deadline. Washington has offered the bloc a reprieve to speed up talks on a series of trade issues.

The German news agency DPA reported on Thursday that the upcoming meeting between Chancellor Angela Merkel and US President Donald Trump — scheduled for the weekend — was unlikely to win the EU a further exemption from higher steel and aluminum tariffs planned by Washington.

Citing government sources, DPA said the Trump administration’s plans to impose a 25 percent tariff on steel and 10 percent on aluminum imports to the United States would likely come into effect on May 1.

But maybe something miraculous will happen at the absolutely very last second to hold off trade war Armageddon. Maybe it won’t. Hard to say for sure so be sure to stay tuned.

Bundesregierung befürchtet Handelskrieg mit den USA

But Nobody Said We Couldn’t Do It Until Now

Trump is right about trade and Merkel needs to do something about it, former German state secretary says.

Trade

In early March, Trump started by implementing tariffs on aluminum and steel imports — measures that did not represent a big impact for China, but did for countries like Japan and potentially Europe too.

Germany has also faced international criticism for its trade surplus, which means its exports outweigh its imports, as some see it as unfair, imbalanced and a cause for protectionism elsewhere.

“Germany is really out there as the main culprit, so to say, because Germany has the highest surplus, much higher than China in terms of GDP… Germany has to do something against it, that’s absolutely clear,”

“Trump is awful but…”

“He’s right.”

Handelsbilanz

Uh-oh. All bets are off now. I may have found a German economist who is willing to take an unpopular stand and defend certain aspects of the Trump administration’s policy. Unpopular? Sacrilegious is more like it, right?

“On one side there’s the EU with a trade surplus that is mostly supplied by the huge German surplus. On the other side is the USA that has been living with deficits for 30 years. Germany is the world’s largest surplus country and the USA is the world’s largest deficit country. The trade practiced between these two national economies may be free but it is not efficient. This criticism of the German undervaluation strategy – that is, the relatively weak salary increases combined with a weak euro – has been around since presidents Bill Clinton and Barack Obama. Politicians in Congress have warned about making trade deals with notorious surplus countries. Trump is just the first one to do anything about it.”

“Every country can do whatever it wants – but not when it is part of a currency union in which there are no exchange rates that could be adjusted. Germany procures an advantage in global trade not just due to the quality of its products vis-a-vis its EU partners, the USA and other countries. In the past 15 years salaries in Germany have remained far behind productivity. We gain advantages over other national economies through wage dumping.”

“Will the punitive tariffs have a real effect on the German economy? Not so quickly. They have just been little needle pricks up until now. But if the EU now pursues the loud-mouth announcements made by Commission President Jean-Claud Juncker and reacts with its own punitive tariffs it is possible that the USA’s reaction will be more massive. Yet Trump is merely following a very simple rule here that no one in Germany wants to believe: The losers in such a trade conflict will be the trade surplus countries and the winners will be the deficit countries.”

Aber wenn die EU jetzt den großmäuligen Ankündigungen des EU-Kommissionspräsidenten Jean-Claude Juncker folgt und mit eigenen Strafzöllen reagiert, kann es sein, dass die USA noch massiver reagieren. Trump folgt doch einer einfachen Regel, die in Deutschland niemand wahr haben will: Verlieren werden in einem solchen Handelskonflikt die Handelsüberschussländer und gewinnen werden die Defizitländer.

Germans Oddly Quiet About Protests In Iran

I wonder why?

Iran

I know, let’s ask the Tasnim News Agency: The head of the German-Iranian Chamber of Commerce said Germany sold 2.358 billion euros ($2.846 billion) worth of goods to Iran, and imported just $328 million worth of goods from Iran in nine months from January through October 2017.

“Germany’s trade surplus with Iran is massive. But that’s nothing new. The Iranians complain about it from time to time, and we try to find ways to encourage more Iranian exports into Europe and Germany, but we’ve been running big trade surpluses with Iran for forty years.”