16 October 2018
There are plenty of examples showing how US President Donald Trump doesn't see eye to eye with German Chancellor Angela Merkel. Photo: Reuters
There are plenty of examples showing how US President Donald Trump doesn't see eye to eye with German Chancellor Angela Merkel. Photo: Reuters

Trade protectionism is rearing its ugly head again

Recently, US President Donald Trump shared a rather awkward moment with German Chancellor Angela Merkel while she was on a visit to Washington. In the Oval Office, Trump appeared to snub her by declining to shake her hand in front of journalists.

The cold shoulder that Merkel got was a stark contrast to the warm welcome British Prime Minister Theresa May had received when she visited Washington and met Trump back in January, indicating that the new Republican president might not get along as much with his German counterpart as former president Barack Obama did.

In fact, there has been no shortage of examples showing how Trump doesn’t see eye to eye with his German ally on various issues such as immigration, cost-sharing over NATO and international trade ever since he assumed office.

In particular, Washington and Berlin seem to have fundamental differences over trade issues, and as a result, the statement jointly announced by financial secretaries who had attended the recent G20 finance ministers’ meeting in Germany didn’t assert any commitment by members to anti-protectionism as it did over the past 10 years.

Nor did the joint statement include any provision on promoting multilateral efforts to fight climate change, mainly due to the objections of the US. Perhaps one should not have been surprised by that as Trump had repeatedly referred to the climate change issue as a “hoax” during his campaign.

It appears the US is no longer on the same side as the international community when it comes to upholding free trade and fighting protectionism.

Instead, it is getting increasingly apparent that Washington is actually turning into the biggest champion of protectionism itself, and it seems it couldn’t care less if its new approach might upset some of its longstanding and steadfast trading partners.

Before the recent G20 meeting, the International Monetary Fund (IMF) had warned that the escalating trade protectionism may hamper global economic recovery over the next couple of years, and called on nations to establish a multilateral framework to uphold free trade.

To make things worse, the US is not alone in once again putting up trade barriers. As Michael Clauss, the incumbent German ambassador to China, has criticized earlier, the Chinese government has become increasingly protectionist in recent years.

For example, he pointed out that the service industry in China remains basically off-limits to foreign companies.

On the other hand, foreign entrepreneurs operating in China are often forced to conclude joint-venture deals with Chinese companies and transfer their core technologies to their mainland partners, a practice that violates the World Trade Organization.

As the two largest economies in the world are simultaneously shutting foreign products and companies out of their domestic markets, the world is now shrouded in apprehension about the rising tide of protectionism.

This article appeared in the Hong Kong Economic Journal on Mar. 20

Translation by Alan Lee

[Chinese version 中文版]

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