Daily Management Review

US Tariffs Makes Germany And China To Agree On To Work Together To Reduce Steel Overcapacity


03/20/2018




US Tariffs Makes Germany And China To Agree On To Work Together To Reduce Steel Overcapacity
Germany and China have agreed to work on finding solutions to the issue of overcapacity in the global steel market according to the framework of the G20 group of industrialised nations after a discussion over the issue between the leaders of the two countries – Germany’s Angela Merkel and China’s Xi Jinping, said a spokesperson for Merkel.
 
The discussions which took place over the phone culminated in the two parties agreeing to enhance the strategic understanding between them in the wake of both of them facing U.S. tariffs on steel and aluminum even as both the leaders stressed on the close ties between the two countries, said Steffen Seibert in a statement.
 
The two leaders emphasized on the role and significance of global trade and multilateral cooperation in a specific response to the enhanced focus of the U.S. under President Rump to move away from the multilateral action and institutions.
 
China and Germany should "become advocates for new-type international relations", Xi reportedly told Merkel according to Chinese state news agency Xinhua, and despite the ideological differences between the two countries, they should become cooperation partners. Xi stressed pushing ye forward of the mutual relations on the basis of the framework of the Belt and Road initiative.
 
"China-Germany relations will steadily proceed far as long as they adhere to equality and mutual respect, understand and care for each other's core interests and major concerns, and properly control and handle their differences," Xinhua said, attributing the comments to Xi.
 
With the intention of thwarting the Chinese government providing subsidies to companies and its investment policies, the U.S. wants to coordinate with "like-minded" countries during the meeting of the finance ministers of the Group of 20 early next week in Argentina, U.S. officials have said.
 
There is an environment of tension between Europe, China and the United States over the decision of Trump to impose import tariffs on steel and aluminum and following Chinese rejection of the legislation passed in the U.S. in relation to exchanging of officials between U.S. and Taiwan and the phone call between Merkel and Xi was made amidst such an environment. Taiwan is considered by China to be its territory and opposes any official recognition of the island as a separate nation.
 
Seibert said that Merkel and Xi "discussed the problem of global overcapacities in the steel market and backed continued efforts to work toward solutions in the framework of the G20 Global Forum (on Steel Excess Capacity)," while referring to an agency started at in 2016 in Hangzhou, China, during the G20 summit.
 
"In this regard, they emphasised the importance of close multilateral cooperation on trade," he said.
 
Both China and Germany have been criticized by Trump for the trade surplus that they have with the U.S.
 
Increasing demand back home has resulted a trend of reduction of Germany’s trade surplus and this trend would be supported by the government, Merkel said on.
 
the principles of the World Trade Organization have been violated by the planned U.S. tariffs, Merkel said while suggesting talks if possible for solving of the issue.
 
(Source:www.cnbc.com)






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