Schaeuble Warns US Pullback Could “End Our Liberal World Order”

Less than a month after German Chancellor Angela Merkel warned that “Europe must take its fate into its own hands,” Finance Minister Wolfgang Schaeuble implored US President Donald Trump to reconsider his “America First” policy, claiming that a pullback by the US would risk the destruction of “our liberal world order” by ceding influence to the Chinese and the Russians.

Trump’s hostility toward his European partners has strained relations between the US and its Continental allies. Since taking office, Trump has insulted fellow G-7 and NATO leaders, pulled out of the Paris Accord and attempted to ban travelers and refugees from six Muslim majority countries. Though Trump has treated at least one NATO leader with respect: Romanian President Klaus Iohannis, whom he honored with a Rose Garden press conference.

Bloomberg described Schaeuble’s comments as “one of the strongest expressions of concern among European policy makers that President Donald Trump’s administration is disengaging the US from its global roles on trade, climate change and security.”

“I doubt whether the United States truly believes that the world order would be equally sound if China or Russia were to fill the gaps left by the US, and if China and Russia were simply given a free hand to dominate the spheres of influence that they have defined for themselves,” Schaeuble, 74, said in a speech at the American Academy in Berlin, a think tank that promotes U.S.-German ties. “That would be the end of our liberal world order.”

Schaeuble also claimed that maintaining global security is in the best interest of the US.

“It is surely in the United States’ own interest to ensure security and economic stability in its markets, both in Europe and around the world…[t]his is a basic precondition if the US wants to increase its exports and cut its trade deficit.”

Schauble was speaking to an audience at the American Academy of Berlin that included Henry Kissinger and Treasury Secretary Lawrence Summers. In three weeks, Merkel will host Trump, Russian leader Vladimir Putin and host of other world leaders at a G-20 summit in Hamburg.

As Bloomberg reported, Merkel pushed back against some of Trump's comments regarding the US-German trade relationship on Wednesday during an event in Berlin marking the 70th anniversary of the Marshall Plan. She defended free trade, claiming that protectionism and isolationism “impede innovation, and in the long run this is disadvantageous for everybody.”

Trump has attacked Germany’s trade surplus as “very bad” and said he would stop German car companies from selling “millions of cars” in the US. Data form the Census Bureau show the United States had a $ 65 billion trade deficit in goods with Germany in 2016, the third-largest negative balance after a $ 69 billion shortfall with Japan and a $ 347 billion deficit with China.

However, there’s an element of hypocrisy in Schauble and Merkel’s warnings about China. Germany has done nothing to stymie China's rise. It has only helped elevate China’s standing on the global stage by embracing it as an ally in the fight against climate change and as a partner in trade. To wit: China was Germany’s largest trading partner last year. eclipsing the US.

Merkel also said that she’s open to discussing proposals for a joint “euro-area budget” with French President Emmanuel Macron – stealing a policy position from her political rival, Social Democrat leader Martin Schultz. A federal budget would help benefit the euro-area’s weakest economies, like Greece, Portugal and Italy, but it would also offset some of the immense advantages that Germany reaps as part of the monetary union. German citizens would effectively subsidize their European neighbors, though Germany would still benefit from a weaker currency.

According to Bloomberg, Merkel’s comments come at a time of “special significance.” Merkel is seeking a fourth term in office in September, when Germany is holding a national election. But she’s been losing ground in the polls to Schultz and his social democrats. Worried about her standing, it seems Merkel has hit upon a new campaign strategy: Distract Germans from their domestic woes by bashing the US.

source http://capitalisthq.com/schaeuble-warns-us-pullback-could-end-our-liberal-world-order/