Germany slams Trump's import tariffs as trade war fears grow
The White House is reportedly poised to announce up to $60 billion in new duties on Chinese goods later on Thursday.
"We consider these tariffs unlawful," Merkel told lawmakers in the German parliament Wednesday.
Trump has consistently singled out China for what he says are unfair practices in the global trade arena.
Europe's economic powerhouse has condemned President Donald Trump 's plans to impose sanctions against China on Thursday.
The White House is reportedly poised to announce up to $60 billion in new duties on Chinese goods later on Thursday. The Trump administration has previously claimed China is responsible for encouraging the theft and transfer of intellectual property away from U.S. businesses.
"Past experience with tariffs is that if one country starts then there is retaliation and the overall impact is negative for everybody," Clemens Fuest, president at Germany 's IFO Institute, told CNBC Thursday.
Fuest said while the threat of an escalating trade war over the coming months is "dampening the mood" in Berlin, the U.S. is just as likely to find itself suffering the economic consequences of global tariffs.
"I think it is a very bad idea," he concluded.
Trump's tariffs are 'unlawful'
Trump has consistently singled out China for what he says are unfair practices in the global trade arena. He has also blamed the Asian giant for Washington's massive trade deficit, which he said harmed American businesses and workers. The U.S.-China trade gap hit an all-time high of $275.81 billion last year.
In response to reports the U.S. is planning to target Beijing's technology, telecommunications and intellectual property products on Thursday, China has threatened to take retaliatory action. The world's second-largest economy threatened to hit America's agriculture exports if the tariffs are announced, stoking fears of a global trade war.
"We consider these tariffs unlawful," Chancellor Angela Merkel told lawmakers in the German parliament Wednesday. She went onto add Germany was convinced Washington's threat to impose protectionist policies would ultimately hurt everyone.
Talks of a tit-for-tat trade war were initially triggered earlier this month, when Trump announced hefty charges on steel and aluminum imports. Trump cited national security concerns as a reason for the charges, though they were widely regarded as an attack on Chinese overproduction. However, they could also have ramifications for key allies — including members of the European Union (EU).
When asked whether the U.S. and EU were struggling to overcome massive philosophical differences, Pierre Vimont of political analysis firm Carnegie Europe told CNBC Thursday: "Yes, I think it is at the heart of the problem. This whole system here in Brussels was built precisely on the idea that we were going to enhance the multilateral process."
"Everybody has to do a little of concession to move forward," he added.
'Unilateral approach is a worry'
Since taking office, Trump has sought to pursue an unwavering approach on trade. In addition to abandoning a 14-nation Pacific trade pact, he has threatened to pull out of the North American Free Trade Agreement (NAFTA) and lambasted Germany for its role in allegedly trying to gain an export advantage with its car industry.
However, the U.S. president has often since relaxed his hard-line stance, granting exemptions to Canada and Mexico over some of the suggested metals tariffs and entering bilateral talks with the EU to discuss further potential exemptions.
"If the U.S. operated with Europe, then there could be ways for a multilateral framework to actually address these issues (with China) … But they are doing it unilaterally and that's a worry," David Riley, chief investment strategist at BlueBay Asset Management, told CNBC Thursday.
— CNBC's Yen Nee Lee contributed to this report.
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