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German Car Bosses Summoned Tp Washington, WTO Warns Of Global Trade Crisis


12/04/2018


German Car Bosses Summoned Tp Washington, WTO Warns Of Global Trade Crisis
Even as top executives of German car companies gathered in the United States capital Washington in the hope of avoiding potential import tariffs on luxury cars by the Donald Trump administration, the World Trade Organization (WTO) warned on Tuesday of he crisis that is being faced by the global system of international trade.
 
The top officials of German car makers Daimler, BMW and Volkswagen were asked to participate in a meeting with White House economic adviser Larry Kudlow to deliberate on the measures taken by the US of rebalancing global trade.
 
This meeting was preceded by multiple threats from Trump about the imposition of import tariffs on foreign cars into the US and in the wake of a broader temporary standoff in the US trade war with China.
 
“The system is in crisis mode and how this plays out remains to be seen,” WTO Deputy Director General Karl Brauner said at the Handelsblatt automotive summit in Wolfsburg, Germany.
 
Brauner warned that when unilateral actions that is in opposite direction to the established direction of global trade is taken by large countries, there is threat to the continuance of global trade and welfare.
 
“You need legal certainty and predictability, and if everybody just does whatever they want, it’s over,” Brauner said. This meeting with German car manufacturers, Brauner added, would help the US administration to get an understanding about the impact that tariffs barriers causes to global trade.
 
Until the German government undertook any measures that can create a “rebalancing” of trade, a 35 per cent import tax would be imposed in cars made in Germany and imported to the US, Trump had warned the carmakers in 2017.
 
While claiming the Europeans were not purchasing enough US made cars, Trump had lamented that there were too many Mercedes-Benz cars rolling down New York’s Fifth Avenue.
 
The call to the bosses of the German car makers by the Trump administration is odd because the task of negotiations on behalf of the European Union is typically done by the executive arm of the EU – the European Commission.
 
According to reports, a proposal to increase the number of car components that are manufactured in the US would be given by the German car bosses to pacify the Trump administration.
 
Reports also suggest that the largest car maker in the world – Volkswagen, will stress on its plans of enhancing its manufacturing capacity in North America to augment electric car production.
 
German car companies lead the list of the number of net exporters of vehicles to and from the United States. For example, most of their sport utility vehicles are manufactured in the US plants by BMW and Mercedes and exported to other parts of the world while luxury cars made in Germany are exported into the US.
 
“The German car bosses will not try to negotiate international trade policy, but they will ensure that the people in Washington have the same understanding about the impact of their policies as the mayor of Chattanooga,” Brauner said.
 
(Source:www.economictimes.com)