BERLIN (Reuters) – Europe should impose punitive tariffs on imports from the United States if President Donald Trump acts to shield U.S. industries from foreign competitors, a senior ally of German Chancellor Angela Merkel said in a newspaper interview.
Trump has already formally withdrawn the United States from the Trans-Pacific Partnership trade deal, distancing America from its Asian allies, and vowed to renegotiate the U.S. free-trade deal with Canada and Mexico.
The tycoon-turned-president has also threatened German carmakers with a border tax of 35 percent on vehicles imported into the U.S. market, saying such a levy would help create more jobs on American soil.
“If Donald Trump imposes punitive tariffs on German and European products, then Europe should also impose punitive tariffs on U.S. products,” Volker Kauder, parliamentary floor leader of Merkel’s conservatives, told the Funke media group in an interview published on Saturday.
“We cannot accept everything,” Kauder added.
He said German officials would have to remind “our friends in Washington” that trade wars in the past had already shown that both sides only lost from such measures.
“We just have to say calmly and with self-confidence: If Trump carries out what he said, then Europe must react,” Kauder said.
The German government has vowed to protect global free trade after Trump threatened protectionist measures and his top adviser on trade accused Germany of exploiting a weak euro to boost exports.
German Vice Chancellor Sigmar Gabriel has suggested that the European Union should refocus its economic policy toward Asia, should the Trump administration pursue protectionism.
In a sign of already shifting trade flows, China became Germany’s most important trading partner for the first time in 2016, overtaking the United States, which fell back to third place behind France, data showed on Friday.
(Reporting by Michael Nienaber; editing by Richard Lough)