Merkel, Macron to challenge Trump over climate change

The G20 (Group of 20 economic powers) will meet in Hamburg on 7 and 8 July. Angela Merkel has signalled she will challenge Donald Trump on climate change and “isolationism and protectionism”.

A week after attending the G7 last month Trump said that the US would pull out of the Paris climate agreement. He appeared to not want to address it up front while meeting with other world leaders.

Reuters: Merkel issues warning to Trump ahead of G20 summit

German Chancellor Angela Merkel promised to fight for free trade and press on with multilateral efforts to combat climate change at the G20 summit next week, challenging the “America First” policies of U.S. President Donald Trump.

In a defiant speech to parliament a week before she will host a summit of the world’s top economic powers in Hamburg, the northern port city where she was born, Merkel did not mention Trump by name but said global problems could not be solved with protectionism and isolation.

“These will not be easy talks,” Merkel said. “The differences are obvious and it would be wrong to pretend they aren’t there. I simply won’t do this.”

Ahead of the G20 summit, Trump’s administration has threatened to take punitive trade measures against China, including introducing tariffs on steel imports.

Merkel’s trade challenge:

“Anybody who believes the problems of the world can be solved with isolationism and protectionism is making a big mistake,” Merkel said.

Merkel and Macron on the Paris accord:

Merkel said she was “more determined than ever” to make the Paris accord a success since Trump’s decision to pull out, calling climate change an “existential challenge”.

“We cannot wait until every last person on earth has been convinced of the scientific proof,” she said.

French President Emmanuel Macron, in Berlin for the meeting of EU leaders, which included the prime ministers of Italy, Spain, the Netherlands and Britain, said he hoped the United States would “return to reason” on climate.

Trump is unlikely to backtrack on fulfilling one of the election promises he followed through on. It will be interesting to see whether he is willing to engage and debate at the G20 meeting, or avoid it and do his own thing regardless.

 

China versus US on trade protectionism

Donald Trump has clearly signalled a far more protectionist stance on trade. He is scrapping the Trans Pacific Partnership, and wants to renegotiate the North American Free Trade Agreement.

In his inauguration speech Trump said:

For many decades, we’ve enriched foreign industry at the expense of American industry; subsidized the armies of other countries while allowing for the very sad depletion of our military; we’ve defended other nation’s borders while refusing to defend our own; and spent trillions of dollars overseas while America’s infrastructure has fallen into disrepair and decay.

We’ve made other countries rich while the wealth, strength, and confidence of our country has disappeared over the horizon.

One by one, the factories shuttered and left our shores, with not even a thought about the millions upon millions of American workers left behind.

The wealth of our middle class has been ripped from their homes and then redistributed across the entire world.

But that is the past.

From this moment on, it’s going to be America First.

Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength.

I will fight for you with every breath in my body — and I will never, ever let you down.

We will follow two simple rules: Buy American and hire American.

He followed that with “We will seek friendship and goodwill with the nations of the world” which may be a hard deal given his rhetoric on trade.

In contrast Chinese President Xi has recently talked in support of globalisation and against protectionism at the World Economic Forum in Davos.

“Protectionism is like locking yourself in a dark room, which would seem to escape wind and rain, but also block out the sunshine. No one is a winner in a trade war.”

NZ Herald: China’s Xi warns against trade war in defense of globalisation

Xi used his speech to support a global economic order that has helped fuel China’s almost four-decade economic boom.

The Chinese president called on the world’s business and political elite to address the problems of globalisation, without turning away from economic trends that have fueled decades of growth.

Leaders should address the excesses of growth, such as growing wealth gaps, while embracing new industries and innovation, he said.

“There is no point in blaming economic globalization for the world’s problems because that is simply not the case, and that will not help to solve the problems.”

“The history of mankind has shown us that problems are not to be feared. What should concern us is the refusal to face up to the problems.”

Globalisation has lifted a huge number of people out of poverty in places like China and India, but it has created problems as Xi acknowledges.

With the US under Trump clamping down on trade agreements this will force China to look for other markets, and gives China an opportunity to become more dominant around the world.

More introspection and trade protection may work for the US,  and the world needs a healthy US economy, but the rest of the world may also learn to get by more with less US trade and influence.

In Communist China now more pro free trade than the US David Farrar says:

What a funny world where we live where the leader of the Communist Party of China is more pro free trade than the leader of the Republican Party of the United States.

Sad!

It is a major turnaround, but i don’t know why one should be sad about it. When one door closes another opens – New Zealand has long experience with trying different trade doors.

It will be interesting to see how this pans out.