Latest news with #GermanMarshallFund
Yahoo
5 days ago
- Business
- Yahoo
Germany's Merz to face Trump in Oval Office on inaugural trip
By Sarah Marsh, Andrea Shalal and Andreas Rinke BERLIN/WASHINGTON (Reuters) -Germany's new chancellor, Friedrich Merz, will hold his first face-to-face talks with U.S. President Donald Trump on Thursday in a high stakes meeting in the Oval Office as Europe seeks to stave off looming U.S. tariffs and sustain U.S. backing for Ukraine. The 69-year-old conservative, who took the helm of Europe's largest economy last month, is scheduled to join Trump for lunch and one-on-one talks that analysts say could set the tone for U.S.-German ties for years to come. Germany's export-oriented economy stands more to lose from U.S. tariffs than others and the country is also the second largest military and financial backer of Ukraine in its defence against Russia's invasion, after the United States. The meeting comes amid a broader fraying of the transatlantic relationship. Trump's administration has, for example, intervened in domestic European politics in a break with past practise, aligning with right-wing political movements and challenging European policies on immigration and free speech. The encounter will be closely watched after some recent meetings in the Oval Office, with the leaders of Ukraine and South Africa, for example, turned tense when Trump ambushed them with false claims and accusations. Merz and his entourage have sought coaching from other leaders on how to deal with Trump to avoid conflict. The meeting comes just weeks before a critical summit of the NATO Western military alliance which is looking increasingly strained given Trump's threats not to come to the aid of U.S. allies that do not up their spending on defence. Such threats are of particular concern to Germany, which has relied on U.S. nuclear deterrence for its security since the end of World War Two. Merz has already made some bold policy moves that he can highlight to appease Trump, analysts said. He has backed Trump's demand to more than double NATO's spending target to 5% of economic output, earning unprecedented praise last weekend from U.S. Defence Secretary Pete Hegseth. Merz, who has vowed a more assertive foreign policy, also coordinated a visit by European leaders to Kyiv just days after taking office, two European diplomat sources said. "This shows that Germany is willing to accept a greater responsibility for Ukraine and the European security order – these are all things that have been wished for in the United States over years and will be welcomed," said Sudha David-Wilp of the German Marshall Fund of the United States. "Germany is well-positioned to show that it can help the United States achieve its foreign policy goals." The fact Merz was invited to stay in the Blair House guest quarters across from the White House is a positive signal, said analysts. KINDRED SPIRIT OR FOE? Merz and Trump could even find some common ground given their business backgrounds, their membership in right-of-centre political parties, their focus on fighting illegal immigration and their fondness for golf, said Steven Sokol, President and CEO of the American Council on Germany. They also both had run-ins with former German chancellor Angela Merkel - who once squeezed Merz out of top-level politics. Moreover Merz has described himself as "a convinced transatlanticist", chairing the "Atlantic Bridge", a non-profit fostering U.S.-German ties, for 10 years. "They might discover a kindred spirit," Sokol said. Still, Trump was unpredictable, while Merz was impulsive, warned analysts, and there were huge frictions in the relationship. "The challenge that he could face is ... if Trump says something is erroneous, do you correct him? Do you risk turning it into an argument?" said Jeffrey Rathke, a former U.S. diplomat and president of the American-German Institute at the Johns Hopkins University in Washington. "Or do you find a way to indicate that you see it differently, but not let it sidetrack the conversation." U.S. administration officials remain upset that Merz criticized Trump shortly before the 2024 U.S. election, a source familiar with its thinking said. And, on the eve of his own election victory, Merz criticised the "ultimately outrageous" comments flowing from Washington during the campaign, comparing them to hostile interventions from Russia. Another possible landmine could be a recent German proposal for a levy on online platforms such as Alphabet's Google, and Meta's Facebook, especially given Trump's close ties with the U.S. tech industry, he said.
The Star
5 days ago
- Business
- The Star
Germany's Merz to face Trump in Oval Office on inaugural trip
BERLIN/WASHINGTON (Reuters) -Germany's new chancellor, Friedrich Merz, will hold his first face-to-face talks with U.S. President Donald Trump on Thursday in a high stakes meeting in the Oval Office as Europe seeks to stave off looming U.S. tariffs and sustain U.S. backing for Ukraine. The 69-year-old conservative, who took the helm of Europe's largest economy last month, is scheduled to join Trump for lunch and one-on-one talks that analysts say could set the tone for U.S.-German ties for years to come. Germany's export-oriented economy stands more to lose from U.S. tariffs than others and the country is also the second largest military and financial backer of Ukraine in its defence against Russia's invasion, after the United States. The meeting comes amid a broader fraying of the transatlantic relationship. Trump's administration has, for example, intervened in domestic European politics in a break with past practise, aligning with right-wing political movements and challenging European policies on immigration and free speech. The encounter will be closely watched after some recent meetings in the Oval Office, with the leaders of Ukraine and South Africa, for example, turned tense when Trump ambushed them with false claims and accusations. Merz and his entourage have sought coaching from other leaders on how to deal with Trump to avoid conflict. The meeting comes just weeks before a critical summit of the NATO Western military alliance which is looking increasingly strained given Trump's threats not to come to the aid of U.S. allies that do not up their spending on defence. Such threats are of particular concern to Germany, which has relied on U.S. nuclear deterrence for its security since the end of World War Two. Merz has already made some bold policy moves that he can highlight to appease Trump, analysts said. He has backed Trump's demand to more than double NATO's spending target to 5% of economic output, earning unprecedented praise last weekend from U.S. Defence Secretary Pete Hegseth. Merz, who has vowed a more assertive foreign policy, also coordinated a visit by European leaders to Kyiv just days after taking office, two European diplomat sources said. "This shows that Germany is willing to accept a greater responsibility for Ukraine and the European security order – these are all things that have been wished for in the United States over years and will be welcomed," said Sudha David-Wilp of the German Marshall Fund of the United States. "Germany is well-positioned to show that it can help the United States achieve its foreign policy goals." The fact Merz was invited to stay in the Blair House guest quarters across from the White House is a positive signal, said analysts. KINDRED SPIRIT OR FOE? Merz and Trump could even find some common ground given their business backgrounds, their membership in right-of-centre political parties, their focus on fighting illegal immigration and their fondness for golf, said Steven Sokol, President and CEO of the American Council on Germany. They also both had run-ins with former German chancellor Angela Merkel - who once squeezed Merz out of top-level politics. Moreover Merz has described himself as "a convinced transatlanticist", chairing the "Atlantic Bridge", a non-profit fostering U.S.-German ties, for 10 years. "They might discover a kindred spirit," Sokol said. Still, Trump was unpredictable, while Merz was impulsive, warned analysts, and there were huge frictions in the relationship. "The challenge that he could face is ... if Trump says something is erroneous, do you correct him? Do you risk turning it into an argument?" said Jeffrey Rathke, a former U.S. diplomat and president of the American-German Institute at the Johns Hopkins University in Washington. "Or do you find a way to indicate that you see it differently, but not let it sidetrack the conversation." U.S. administration officials remain upset that Merz criticized Trump shortly before the 2024 U.S. election, a source familiar with its thinking said. And, on the eve of his own election victory, Merz criticised the "ultimately outrageous" comments flowing from Washington during the campaign, comparing them to hostile interventions from Russia. Another possible landmine could be a recent German proposal for a levy on online platforms such as Alphabet's Google, and Meta's Facebook, especially given Trump's close ties with the U.S. tech industry, he said. (Reporting by Sarah Marsh in Berlin, Andreas Rinke and Andrea Shalal in Washington; Editing by Sandra Maler)
New York Times
29-05-2025
- Business
- New York Times
Chaos vs. Hope: America's Trading Partners React Cautiously to Tariff Block
The Trump administration's threat to slap 50 percent tariffs on the European Union and steep tariffs of varying sizes on other critical American trading partners hung in limbo on Thursday after a panel of U.S. federal judges blocked a set of across-the-board charges. But both trade experts and America's trading partners around the world greeted the news with caution, not celebration. Stocks rose internationally as investors hoped the decision, handed down by the U.S. Court of International Trade, might restrain the assault that Washington is waging on world markets. President Trump's top aides had told the court in recent days that an adverse ruling could weaken the administration's negotiating position and imperil ongoing talks. Yet economists pointed out that Mr. Trump could turn to other legal routes to enact across-the-board tariffs. The administration has already filed plans to appeal the decision. Given that, the court's move offered only a fragile chance at reprieve for economies like those of Australia, Britain, Canada, the European Union and India. And it all but guaranteed continued chaos. On the one hand, Washington has been using the threat of sky-high tariffs, enacted unilaterally by the president and without congressional approval, as a cudgel in trade discussions; that might now be a somewhat diminished tool. But on the other, it was not clear whether the reprieve would be sustainable or if the Trump administration would quickly find a way to work around it. The court decision was therefore poised to set off days of scrambling, as the United States tries to reinstate tariffs and global partners watch to see whether that will be possible. 'The real sense I'm getting in Europe is that they're planning for the worst and hoping for the best,' said Georgina Wright, a senior fellow at the German Marshall Fund who specializes in policy in Europe. In a trade drama replete with uncertainty, she said, 'this is just another episode.' America's trading partners reacted carefully to the news. Don Farrell, Australia's trade minister, said that his nation would 'study this ruling' while noting that 'they may be subject to further legal processes.' The European Union declined to comment altogether. There is a reason for that muted response. For one thing, the court's decision, announced late Wednesday, does nothing to roll back sector-specific tariffs on steel and aluminum and on cars or to forestall future tariffs on pharmaceuticals. That could leave the United States and trading partners in Europe and elsewhere negotiating intensively on those economically important sectors in coming weeks. 'The question about trying to find a solution is still there,' said Ignacio García Bercero, a nonresident fellow at the think tank Bruegel who was formerly a top trade negotiator at the European Commission. The court decision does block — at least temporarily — a set of across-the-board tariffs that Washington enacted on a range of trading partners after an early April announcement. Those tariffs are now set to 10 percent, but they are poised to ratchet up to higher levels that vary by country in early July, after a 90-day 'pause' that the Trump administration enacted to allow for negotiations. Mr. Trump has been using a novel interpretation of the International Emergency Economic Powers Act, a 1977 law, to impose those sweeping levies. But the court said the legislation did not grant him 'unbounded authority' to enact tariffs. The ruling gives the administration 10 days to halt collection of the tariffs in question. That is probably not enough time for the Trump administration to successfully challenge the ruling in appeals court — and, potentially, to appeal again to the Supreme Court — according to analysts at Goldman Sachs. Still, that doesn't mean the tariffs will definitely lapse. The administration could 'quickly replace' the 10 percent tariffs with a tariff of up to 15 percent for 150 days using another trade rule, the Goldman analysts wrote. After that, such tariffs would require congressional approval. Mr. Trump's administration could also open investigations into critical trading partners, which it could then use as the basis for more sustained tariffs. Such investigations, which focus on issues like unfair trade practices, take weeks or months to complete. 'We expect the Trump administration will find other ways to impose tariffs,' Alec Phillips, an economist at Goldman, wrote in his firm's analysis. While Asian stock indexes climbed after the news, a sign of optimism that big multinational corporations might see relief, it was not clear whether that positivity would last. 'In this rapidly evolving landscape, the latest development is unlikely to be the last twist in the tale,' Derren Nathan, head of equity research at the financial services company Hargreaves Lansdown, wrote in a report. 'The world will be watching closely,' he added.
Qatar Tribune
28-05-2025
- Business
- Qatar Tribune
EU rushes for trade deal to avert Trump's 50% tariff
Agencies Top officials at the European Union's executive commission says they're pushing hard for a trade deal with the Trump administration to avoid a 50% tariff on imported goods. Trump had threatened to impose the tariffs on June 1, but has pushed back the deadline to July 9, repeating an oft-used tactic in his trade war. European negotiators are contending with Trump's ever-changing and unpredictable tariff threats, but 'still, they have to come up with something to hopefully pacify him,' said Bruce Stokes, visiting senior fellow at the German Marshall Fund of the United also sees more at play than just a disagreement over trade deficits. Trump's threats 'are rooted in frustration with the EU that has little to do with trade,'' Stokes said. 'He doesn't like the EU. He doesn't like Germany.'What exactly does Trump want? What can Europe offer? Here are the key areas where the two side are squaring and over, Trump has bemoaned the fact that Europe sells more things to Americans than it buys from Americans. The difference, or the trade deficit in goods, last year was 157 billion euros ($178 billion). But Europe says that when it comes to services — particularly digital services like online advertising and cloud computing — the U.S. sells more than it buys and that lowers the overall trade deficit to 48 billion euros, which is only about 3% of total trade. The European Commission says that means trade is 'balanced.' One way to shift the trade in goods would be for Europe to buy more liquefied natural gas by ship from the U.S. To do so, the EU could cut off the remaining imports of Russian pipeline gas and LNG. The commission is preparing legislation to force an end to those purchases -- last year, some 19% of imports — by the end of 2027. That would push European private companies to look for other sources of gas such as the U.S. However the shift away from Russia is already in motion and that 'has obviously not been enough to satisfy,' said Laurent Ruseckas, a natural gas markets expert at S&P Global Commodities Insights Research. The commission doesn't buy gas itself but can use 'moral suasion' to convince companies to turn to U.S. suppliers in coming years but 'this is no silver bullet and nothing that can yield immediate results,' said Simone Tagliapietra, an energy analyst at the Bruegel think tank in Brussels. Europe could buy more from U.S. defense contractors as part of its effort to deter further aggression from Russia after the invasion of Ukraine, says Carsten Brzeski, global chief of macro at ING bank. If European countries did increase their overall defense spending — another of Trump's demands — their voters are likely to insist that the purchases go to defense contractors in Europe, not America, said Stokes of the German Marshall Fund. One way around that political obstacle would be for U.S. defense companies to build factories in Europe, but 'that would take time,'' he said. The EU could also reduce its 10% tax on foreign cars— one of Trump's long-standing grievances against Europe. 'The United States is not going to export that many cars to Europe anyway ... The Germans would be most resistant, but I don't think they're terribly worried about competition from America,'' said Edward Alden, senior fellow at the Council on Foreign Relations. 'That would be a symbolic victory for the president.''The U.S. has long complained about European regulations on food and agricultural products that keep out hormone-raised beef and chickens washed with chlorine. But experts aren't expecting EU trade negotiators to offer any concessions at the bargaining table. 'The EU is unwilling to capitulate,' said Mary Lovely, senior fellow at the Peterson Institute for International Economics. 'The EU has repeatedly said it will not change its sanitary rules, its rules on (genetically modified) crops, its rules on chlorinated chickens, things that have been longtime irritants for the U.S.'' Backing down on those issues, she said, would mean that 'the U.S. gets to set food safety (standards) for Europe.' 'One of Trump's pet peeves has been the value-added taxes used by European governments, a tax he says is a burden on US say this kind of tax, used by some 170 countries, is trade-neutral because it applies equally to imports and exports. A value-added tax, or VAT, is paid by the end purchaser at the cash register but differs from sales taxes in that it is calculated at each stage of the production process. In both cases, VAT and sales tax, imports and exports get the same treatment. The U.S. is an outlier in that it doesn't use VAT. There's little chance countries will change their tax systems for Trump and the EU has ruled it approach to negotiations has involved threats of astronomical tariffs - up to 145% in the case of China - before striking a deal for far lower levels. In any case, however, the White House has taken the stance that it won't go below a 10% baseline. The threat of 50% for the EU is so high it means 'an effective trade embargo,' said Brzeski, since it would impose costs that would make it unprofitable to import goods or mean charging consumers prices so high the goods would be uncompetitive. Because the knottiest issues dividing the EU and U.S. — food safety standards, the VAT, regulation of tech companies — are so difficult 'it is impossible to imagine them being resolved by the deadline,'' Alden said. 'Possibly what you could have — and Trump has shown he is willing to do this — is a very small deal'' like the one he announced May 8 with the United Kingdom. Economists Oliver Rakau and Nicola Nobile of Oxford Economics wrote in a commentary Monday that if imposed, the 50% tariffs would reduce the collective economy of the 20 countries that use the euro currency by up to 1% next year and slash business investment by more than 6%. The EU has offered the US a 'zero for zero' outcome in which tariffs would be removed on both sides industrial goods including autos. Trump has dismissed that but EU officials have said it's still on the table. Lovely of the Peterson Institute sees the threats and bluster as Trump's way of negotiating. 'In the short run, I don't think 50% is going to be our reality.'' But she says Trump's strategy adds to the uncertainty around U.S. policy that is paralyzing business. 'It suggests that the U.S. is an unreliable trading partner, that it operates on whim and not on rule of law,'' Lovely said. 'Friend or foe, you're not going to be treated well by this administration.''
Japan Today
28-05-2025
- Business
- Japan Today
U.S. and EU are in a showdown over trade. What does Trump want and what can Europe offer?
By DAVID McHUGH and PAUL WISEMAN Top officials at the European Union's executive commission says they're pushing hard for a trade deal with the Trump administration to avoid a 50% tariff on imported goods. Trump had threatened to impose the tariffs on June 1, but has pushed back the deadline to July 9, repeating an oft-used tactic in his trade war. European negotiators are contending with Trump's everchanging and unpredictable tariff threats, but 'still, they have to come up with something to hopefully pacify him," said Bruce Stokes, visiting senior fellow at the German Marshall Fund of the United States. Stokes also sees more at play than just a disagreement over trade deficits. Trump's threats 'are rooted in frustration with the EU that has little to do with trade,'' Stokes said. 'He doesn't like the EU. He doesn't like Germany." What exactly does Trump want? What can Europe offer? Here are the key areas where the two side are squaring off. Over and over, Trump has bemoaned the fact that Europe sells more things to Americans than it buys from Americans. The difference, or the trade deficit in goods, last year was 157 billion euros ($178 billion). But Europe says that when it comes to services — particularly digital services like online advertising and cloud computing — the U.S. sells more than it buys and that lowers the overall trade deficit to 48 billion euros, which is only about 3% of total trade. The European Commission says that means trade is 'balanced.' One way to shift the trade in goods would be for Europe to buy more liquefied natural gas by ship from the U.S. To do so, the EU could cut off the remaining imports of Russian pipeline gas and LNG. The commission is preparing legislation to force an end to those purchases -- last year, some 19% of imports — by the end of 2027. That would push European private companies to look for other sources of gas such as the U.S. However the shift away from Russia is already in motion and that 'has obviously not been enough to satisfy," said Laurent Ruseckas, a natural gas markets expert at S&P Global Commodities Insights Research. The commission doesn't buy gas itself but can use 'moral suasion' to convince companies to turn to U.S. suppliers in coming years but 'this is no silver bullet and nothing that can yield immediate results,' said Simone Tagliapietra, an energy analyst at the Bruegel think tank in Brussels. Europe could buy more from U.S. defense contractors as part of its effort to deter further aggression from Russia after the invasion of Ukraine, says Carsten Brzeski, global chief of macro at ING bank. If European countries did increase their overall defense spending — another of Trump's demands — their voters are likely to insist that the purchases go to defense contractors in Europe, not America, said Stokes of the German Marshall Fund. One way around that political obstacle would be for U.S. defense companies to build factories in Europe, but "that would take time,'' he said. The EU could also reduce its 10% tax on foreign cars— one of Trump's longstanding grievances against Europe. 'The United States is not going to export that many cars to Europe anyway ... The Germans would be most resistant, but I don't think they're terribly worried about competition from America,'' said Edward Alden, senior fellow at the Council on Foreign Relations. 'That would be a symbolic victory for the president.'' The U.S. has long complained about European regulations on food and agricultural products that keep out hormone-raised beef and chickens disinfected with chlorine. But experts aren't expecting EU trade negotiators to offer any concessions at the bargaining table. 'The EU is unwilling to capitulate,' said Mary Lovely, senior fellow at the Peterson Institute for International Economics. 'The EU has repeatedly said it will not change its sanitary rules, its rules on (genetically modified) crops, its rules on chlorinated chickens, things that have been longtime irritants for the U.S.'' Backing down on those issues, she said, would mean that 'the U.S. gets to set food safety (standards) for Europe.'' One of Trump's pet peeves has been the value-added taxes used by European governments, a tax he says is a burden on US companies. Economists say this kind of tax, used by some 170 countries, is trade-neutral because it applies equally to imports and exports. A value-added tax, or VAT, is paid by the end purchaser at the cash register but differs from sales taxes in that it is calculated at each stage of the production process. In both cases, VAT and sales tax, imports and exports get the same treatment. The U.S. is an outlier in that it doesn't use VAT. There's little chance countries will change their tax systems for Trump and the EU has ruled it out. Trump's approach to negotiations has involved threats of astronomical tariffs - up to 145% in the case of China - before striking a deal for far lower levels. In any case, however, the White House has taken the stance that it won't go below a 10% baseline. The threat of 50% for the EU is so high it means 'an effective trade embargo," said Brzeski, since it would impose costs that would make it unprofitable to import goods or mean charging consumers prices so high the goods would be uncompetitive. Because the knottiest issues dividing the EU and U.S. — food safety standards, the VAT, regulation of tech companies — are so difficult 'it is impossible to imagine them being resolved by the deadline,'' Alden said. 'Possibly what you could have — and Trump has shown he is willing to do this — is a very small deal'' like the one he announced May 8 with the United Kingdom. Economists Oliver Rakau and Nicola Nobile of Oxford Economics wrote in a commentary Monday that if imposed, the 50% tariffs would reduce the collective economy of the 20 countries that use the euro currency by up to 1% next year and slash business investment by more than 6%. The EU has offered the US a 'zero for zero" outcome in which tariffs would be removed on both sides industrial goods including autos. Trump has dismissed that but EU officials have said it's still on the table. Lovely of the Peterson Institute sees the threats and bluster as Trump's way of negotiating. 'In the short run, I don't think 50% is going to be our reality.'' But she says Trump's strategy adds to the uncertainty around U.S. policy that is paralyzing business. 'It suggests that the U.S. is an unreliable trading partner, that it operates on whim and not on rule of law,'' Lovely said. 'Friend or foe, you're not going to be treated well by this administration.'' © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
