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Germany threatens legal action if US hikes import tax

Donald Trump’s proposal to tax imports may lead to litigation at the World Trade Organization, according to German Economy Minister Brigitte Zypries.

The threat comes ahead of the first meeting of between Chancellor Angela Merkel and the US President on Friday.

Trump has warned the US would impose a 35 percent border tax on BMW vehicles, produced at a new plant in Mexico.

“I'm betting partly on reason and partly on the courts” to stop a damaging trade war, said Zypries in an interview with Deutschlandfunk public radio, Friday.

“The other option is that we file a suit against him at the WTO - there are procedures laid out there because in the WTO agreements it is clearly laid out that you're not allowed to take more than 2.5 percent taxes on imports of cars,” the minister said.

The US became Germany's biggest export market last year, selling €107 billion of goods while importing just €58 billion worth. Germany’s trade surplus has been a source of tension between Washington and Berlin.

“We know ourselves that that's a problem and we're working on it. Thankfully we just heard today that wage rises have been agreed again so that means domestic demand can increase again and we want to address tax incentives for research... so we're on a good path,” Zypries said.

Nearly 72,000 steel workers in northwestern Germany will get a 2.3 percent wage increase starting April and a rise of 1.7 percent from May 1, 2018, according to the employers’ association for the German steel industry Arbeitgeberverband Stahl.

“The Americans need our machines and our plants, and the other point is that we only have an export surplus in the machines and plants sector; in the service sector it's the other way around, due to big internet companies in the United States,” said Zypries.

Frank-Walter Steinmeier to Assume Office as German President on Sunday
by Sputnik News

Former German Foreign Minister Frank-Walter Steinmeier will take office as the next German president on Sunday.

MOSCOW (Sputnik) – In February, Steinmeier, nominated by the ruling coalition, was supported by 931 members of the country's Federal Convention, which is a special body consisting of 630 members of the Bundestag and of the same number of representatives of Germany's states.
Christoph Butterwegge from the Alternative for Germany’s (AfD) party, who finished second, secured support of 128 voters.

Steinmeier, who served as the foreign minister in 2005-2009 and 2013-2017, will begin his term in office a day after expiration of the five-year presidential term of Joachim Gauck, who refused to run for the second term due to his age.

Germany Rejects Donald Trump’s Claim That It ‘Owes Vast Sums of Money’ to NATO, U.S.
by Daniella Silva and Carlo Angerer

The German defense minister on Sunday pushed back on President Donald Trump's claims that the European nation "owes vast sums of money to NATO" and the U.S., following a meeting last week between both countries' leaders that was at times tense.

Trump tweeted on Saturday that he had a "GREAT meeting" with German Chancellor Angela Merkel the day before, but added that "Nevertheless, Germany owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!"

The president was echoing earlier statements he's made referencing the alliance's goals for defense spending during a joint press conference with Merkel on Friday.

German Defense Minister Ursula von der Leyen rejected Trump's claim in a statement on Sunday, saying that "there is no debt account at NATO." Von der Leyen added that it was "wrong" to link the alliance's bar for member nations to spend 2 percent of their gross domestic product on defense by 2024 to NATO alone.

"Defense spending also goes into our UN peacekeeping missions, into our European missions and into our contribution to the fight against [ISIS] terrorism," she said.

Von der Leyen said Germany wanted a fair sharing of the burden and in order for to happen the alliance needed "a modern security concept."

"That includes a modern NATO, but also a European defense union as well as investments into the United Nations," she said.

Ivo Daalder, a former U.S. NATO ambassador, also dismissed Trump's characterization, saying on Saturday "that's not how NATO works."

"This is not a financial transaction, where NATO countries pay the U.S. to defend them. It is part of our treaty commitment," he said on Twitter.

"Those who currently don't spend 2 percent of their GDP on defense are now increasing their defense budgets. That's a good thing," he added. "But no funds will be paid to the U.S. They are meant to increase NATO's overall defense capabilities, given the growing Russian threat."

"Europe must spend more on defense, but not as favor (or payment) to the U.S. But because their security requires it," he added.

Related: Trump to Merkel on Wiretaps: 'At Least We Have Something in Common'

Trump, whose administration has had a friendlier relationship with Russia than any U.S. president in the past, has repeatedly questioned the relevance of NATO — both during and after his presidential campaign — even calling the alliance "obsolete" as recently as January in an interview with Germany's Bild newspaper.

Merkel has been an outspoken advocate for the need to maintain NATO.

On Friday, Trump said at the press conference that he reiterated his "strong support for NATO as well as the need for our NATO allies to pay their fair share for the cost of defense."

"Many nations owe vast sums of money from past years and it is very unfair to the United States," he said. "These nations must pay what they owe."

In a closed door meeting before the press conference, Trump had reportedly pressed the German leader to increase funding for NATO and she reiterated her commitment to the 2 percent defense spending target.

Last month, the White House announced that Trump had spoken with the secretary general of NATO and agreed to join a meeting of the alliance's leaders in Europe in late May.

Trump has been a harsh critic of Merkel in the past for their policy differences, including her handling of the Syrian refugee crisis.

And Merkel opened her remarks at the joint press conference on Friday by taking an apparent dig at Trump, saying "It's much, much better to talk to one another than about one another."

But despite the tense moments — Trump appeared to deny a request for a handshake at one point, thought the White House says he didn't hear it — both leaders on Friday also sought to present a united front.

"Our two nations share much in common, including our desire for prosperity, security, and peace," Trump said.
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