Germany on Thursday pushed back against US criticism of its trade surplus, saying ahead of global finance talks in Washington that nobody could blame Berlin for the competitiveness of ‘Made in Germany’ products. Economy Minister Brigitte Zypries said the government had only limited influence on trade flows, and the surplus – which data shows hit a record 252 billion euros ($271 billion) in 2016 – was linked to factors beyond its control such as the oil price and euro exchange rate. “Our companies produce high-quality machines and equipment that customers abroad like to buy. We do not have to apologise for this,” she told mass-selling Bild newspaper. She pointed to political efforts, such as the introduction of a national minimum wage, tax cuts and increased investment activity to boost domestic demand and imports, as ways of reducing the trade gap.
In a US Treasury currency report on Friday, the Trump administration backed away from naming any major trading partner as a currency manipulator, but kept Germany and five others under scrutiny over their foreign exchange and economic policies.
Germany’s wider current account surplus, which measures the flow of goods, services and investments, swelled to an all-time high of 261.4 billion euros last year, Bundesbank data shows.
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In terms of overall economic output, however, it shrank to 8.3 percent in 2016 from 8.6 percent in 2015, and the government expects a further drop to around 7 percent next year.
In a position paper drawn up ahead of the International Monetary Fund and World Bank talks in Washington, Berlin argues that the current account surplus is a consequence of market-based corporate decisions.
World finance leaders gathering on Trump’s home turf on Thursday are expected to try to nudge his still-evolving policies away from protectionism and to show broad support for open trade and global integration.
The IMF in particular has sounded warnings against Trump’s plans to shrink US trade deficits with potential measures to restrict imports, arguing in its latest economic forecasts that protectionist policies would crimp global growth that is starting to gain traction.