Bundesbank President Jens Weidmann said an exemption of the European Union from U.S. metal tariffs isn’t a victory for free trade, even if it reduces the risk of an escalation in the conflict.
Weidmann, a member of the European Central Bank’s Governing Council, welcomed the agreement that will exclude the block’s 27 members from punitive aluminum and steel duties that took effect on Friday, while warning that the EU’s respite was only temporary.
“It’s not a victory for free global trade because punitive tariffs remain in place for other countries that could not secure preferential treatment, ” he said in a speech in Vienna on Monday. “Therefore, the goal must be not only to prevent new barriers to trade or keep them as low as possible, but to reduce existing ones. I very much hope that recent signals from the U.S. to talk about such a reduction will not fizzle out, but trigger a change of perspective.”
Global finance chiefs were unusually blunt last week in warning that the U.S. is putting at risk the very international order that it helped create. At a G-20 meeting in Buenos Aires, they failed to convince Treasury Secretary Steven Mnuchin to pare back protectionist steps. Mnuchin’s response: “We are not afraid” of a trade war.
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