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USA and Germany – unfriendly Friends in Trade?

Trade in the Age of Geoeconomics
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In April our US delegation of political experts in trade from Congress, business and think tanks visited Hamburg and Berlin. The search for common grounds was easy to recognize on the strategic level: China´s hegemonial aspirations and the aggression from Putin´s Russia need a clear answers from the west. The threats and challenges from China and Russia demand an even closer transatlantic cooperation, politically and economically. Transatlantic trade can be the cornerstone of that cooperation to make the economies more resilient and less exposed to the global geopolitical risks.

The recent geoeconomic shocks resulted in high inflation and even in a recession in Germany. Trade between the US and Germany is already a success story: In 2023, the total value of U.S. trade in goods with Germany amounted to about 236 billion U.S. dollars; composed of exports worth 77 billion U.S. dollars and imports of 160 billion U.S. dollars.

After TTIP, the transatlantic free trade proposal between Europe and the USA, failed during the Obama administration, the delegation tried to find common grounds for closer trade relationships.

Talks with members of parliament, government representatives, the chamber of commerce, EU officials and academic experts revealed both common understanding and different perceptions. EU regulations like CBAM and the minimum tax (OECD I and II) are being criticized in the US debate as directed against US business interests. On the European side, there were some concerns about protectionist actions in the USA for example, the inflation reduction act (IRA) and the growing protectionist approach in both parties in this election year.

This delegation and the meeting partners openly discussed differences among friends. It was a good step forward. However, it is still a long way to go if we want to reach a trade agreement.