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Christian Lindner, Germany’s finance minister, was spotted having a serious chat with US Treasury Secretary Janet Yellen—who, oddly enough, was not pictured—at the annual economic circus called the IMF and World Bank meetings in Washington, DC. One could only imagine the riveting conversation, since serious talks of tariffs and trade often pale in comparison to discussing the weather in October.
Ting Shen | Bloomberg | Getty Images
This week, Lindner warned of a possible trade war tantrum, cautioning the U.S. that they might throw a global temper tantrum if certain policies were enacted. “Trade controversy sees never winners, only losers,” he decreed, as if it were a modern-day economic version of ‘The Hunger Games’ where everyone just ends up in economic wreckage rather than outrageous selfies.
Lindner speculated about what U.S. trade policy might morph into if our favorite former president were to saunter back into office. “In that case, we need diplomatic efforts,” he said earnestly, clearly missing the memo that diplomacy nowadays is often just a fancy word for ‘let’s pretend to be reasonable while we plot behind the curtains.’ If the trade conflict escalates, he promises some good old-fashioned retaliation, which is about as effective as throwing a tantrum when your sibling eats your dessert.
Now hypothetically speaking, if Trump rolls out those blanket tariffs of 10-20% faster than you can say “Make America Great Again”, Lindner warns it could put a dent in Germany’s economy big enough to require several economic Band-Aids. Irony of ironies, Germany’s mainstay is trade—essentially their version of bread and butter. More tariffs? More tantrums? Oh joy.
So, if the economic gods smiled upon us and Trump really did get elected again, we could be facing heavy blows to the German economy (and they might have to actually start eating sauerkraut for dinner). Reports indicate that around 9.9% of German exports traipse over to the U.S. each year. That’s right, 9.9%. Sounds like the beginnings of a German soap opera titled ‘As the Trade Turns’.
Meanwhile, the ongoing U.S.-China trade tug-of-war has become the new Olympic sport of the century, complete with all the emotional baggage of a family reunion gone wrong. Both parties have rolled out sanctions, tariffs, and really quite unreasonable demands, practically inviting China to play a high stakes game of economic poker. Spoiler alert: no one wins, but everyone leaves broke and resentful.
As the EU sips tea and deliberates on their own tariffs on Chinese-made electric cars—because nothing screams ‘friendly trade’ quite like punishing people for trying to innovate—Lindner suggests that maybe, just maybe, avoiding a trade war would be nice. He expresses concern for the German car manufacturing scene, essentially a county fair for adults where everyone hopes the rides don’t fall apart while they’re on them.
Earlier this week, the IMF’s Gita Gopinath chimes in, declaring that escalating tensions over trade tariffs might just “cost everybody,” which seems like a novel idea that maybe just reaching for peace and cooperation might be beneficial. Alas, peace doesn’t often sell newspapers or generate clickbait headlines.
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