German Finance Minister Wolfgang Schaeuble is set to prove critics of Germany’s massive trade surplus wrong with a seven-page ‘lecture’ he is going to deliver at the spring meeting of the International Monetary Fund and the World Bank in Washington.
The fact German exports are significantly greater than its imports has been an issue for lingering international criticism.
Earlier this year, US President Donald Trump joined the army of critics urging Berlin to rein in its €253 billion ($272 billion) trade surplus. Trump warned that he would impose stiff tariffs on goods imported from Germany.
According to German media reports, the finance minister has worked out 29 points aimed to assuage the concerns expressed by the White House. The main points of the paper apparently represent the fundamentals of economic policy.
While German Chancellor Angela Merkel is seeking to boost the country’s domestic economy, expecting the surplus to decrease to seven percent of GDP by next year against 8.6 percent in 2015, most of the factors bolstering the excess are beyond the government’s control, the document says.
“A large part of the current account surplus is determined by factors which cannot be directly influenced by German economic and financial policy. These include temporary factors such as the euro exchange rate or commodity and energy market prices,” the document reads, as quoted by Bloomberg.
In the paper, Schaeuble stresses that US jobs are dependent on Germany while companies and consumers are primarily responsible for the huge surplus.
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“As a member of the European Union, Germany does not pursue an independent trade policy. Rather, trade policy is the competence of the EU. The policy of the federal government is in line with all international trade agreements and arrangements, in particular, it is also World Trade Organization-compliant,” the paper says.
Germany is currently one of America’s most important trading and investment partners, comprising nearly ten percent of all foreign direct investment in the US, according to the report. German corporations provide up to 672,000 jobs in the US while the equipment produced in Germany helps America to stay competitive and sustain jobs. (RT)