Germany’s challenger for the chancellorship, Martin Schulz, vowed Thursday to retaliate against U.S. President Donald Trump’s potential withdrawal from the Paris climate agreement by refusing to engage in transatlantic trade talks.Referring to trade negotiations with the U.S., which ran until the end of last year but are now on ice, Schulz said it would be impossible to grant better market access to the U.S. if it did not respect climate protection rules.
"If the U.S. drops out of the climate agreement ... for European trade policy, this means that American production sites don’t need to abide by the climate goals," said the Social Democratic candidate, who was speaking at the WDR Europa Forum in Berlin. "That is a competitive distortion against which we can only protect ourselves by saying: Whoever wants to have access to our market, and the European market is the biggest market in the world, needs to respect the European standards."
European standards are a joke. Also a bit of background from Stephen Green:
It's a damn good thing Germany has a trade surplus with us.
Let me explain why.
Germany is lacking in two things: Oil and the ability to print U.S. dollars.
Oil is priced in dollars, everywhere around the world. If you want to buy oil, you have to have dollars. If you want a modern economy, you have to have oil.
So if Germany is going to buy oil, they need to earn dollars from us. One good way to do that is to build cars superior to most of what comes out of American manufacturers, and to charge a premium for them.
This works well for Germany for a couple of reasons.
First, as an exporter Germany can't compete on unit volume. There are only so many imported cars U.S. consumers can buy or are willing to buy.
Second, German automakers can't compete on price. If you think American labor is expensive, check out German rates sometime. Also, to build those cars, Germany has to import a lot of raw materials and energy -- also priced in U.S. dollars.
So Germany sells fewer, higher-margin cars to Americans who want to buy them, in exchange for the dollars they need to keep their First World economy humming along. And a lot of those dollars end up right back here, too -- as foreign investments, an economic safe haven, etc.
And a little perspective is in order. Our trade deficit with Germany last year was about $65 billion -- about one-third of one percent of our GDP, or less than what Washington spends every six days. I don't know about you, but when I look at my tax receipts and I look at the services I actually get, I'm far more worried about my trade deficit with the IRS.
Oh, and our trade deficit with Germany isn't even as large as the official data suggest. BMW for one actually exports more American-made BMWs to the rest of the world than BMW imports from Germany to American buyers. (The same is true of Honda and Japanese imports, and may be true of other "foreign" automakers as well.) But BMW's exports from America don't get deducted from the tally of Germany's imports into America. We would cut off that trade to spite our face.
A little more perspective? The typical American family has a trade deficit with King Sooper or Albertson's of about 10% of every paycheck, but nobody seems to worry much about that, even though most of that money goes to corporate headquarters in entirely different states.
So what do we get out of trade with Germany? American consumers get more choices, American manufacturers get some much-needed (and in the case of Detroit, I do mean MUCH-needed) competition, Americans get jobs, and two wealthy countries with well-paid workers get to enjoy all the benefits of friendly trade.
So, Germany has a lot more to lose then we do by closing off their markets or getting into a trade war with the US.