Trump Administration Attacks Free Trade at G-20 Meeting
Analysts were stunned at the outcome of the meeting of finance ministers and central bank governors from the world’s top 20 economies this past weekend in Baden-Baden, Germany. At America’s insistence, G-20 members agreed to exclude free trade from the joint policy declaration that came out of the meeting.
This backing down from the international organization’s longstanding strong support for free trade marked a dramatic change for the G-20.
It was a change entirely precipitated by America’s new presidential administration. As George Friedman, founder of Geopolitical Futures, wrote:
The U.S. indicated that it would not sign the G-20 agreement if it contained wording on free trade. While there is much discussion on U.S. decline, the country still produces about 25 percent of the world’s gdp [gross domestic product], which is a huge amount. Therefore, any document on global economics that does not contain an American signature is irrelevant.
The agreement, Friedman continued, “must be regarded as a historical moment. … [A]llowing the commitment to free trade to be excluded from the agreement represents a fundamental shift in a concept that has been central to global economics for more than a generation ….” German business paper Handelsblatt wrote that “the U.S. administration managed to single-handedly upend the global consensus on trade.”
Though the finance ministers acquiesced to America’s demand at this meeting, tensions between America and other nations over trade—tensions culminating in the early stages of trade war—are clearly increasing.
Rivalry is heating up particularly between America and Germany. The Trump administration has had some strong criticisms for Berlin—accusing it of using a devalued euro for its own gain. Handelsblatt executive editor Stefan Theil wrote in its latest cover article “Trade War” (emphasis added throughout):
The White House’s new trade adviser, Peter Navarro, has accused Germany of “exploiting” its trading partners by shipping much more abroad than it takes in.
The 47 percent of gdp Germany exports make the country far more dependent on free trade than any other large economy, including other export powerhouses like China (22 percent), Japan (18 percent) and the U.S. (13 percent …).
Those exports would be far less likely to attract attention if they weren’t so far out of balance with what Germans buy from abroad.
Rejecting free trade comes in the wake of President Trump’s threat to apply a tariff to cars imported from Germany. America is the single largest importer of German goods. One quarter of all German jobs rely on trade, with 1.6 million jobs relying on trade with the U.S. Even a marginal drop in American demand for German goods would have a massive impact on the German economy—and in the event of a 35 percent tariff, the drop would surely be more than marginal. Galina Kolev, chief economist at the Institute of the German Economy in Cologne, reported, “A trade war would be fundamentally bad for the German economy.”
This rhetoric also threatens something deeper than Germany’s prosperity. Handelsblatt wrote:
The loaded container ships leaving Hamburg harbor are the modern flag-bearers of Germany’s national pride. On board are cars and pharmaceuticals, factory robots and mri machines, Escada dresses and kegs of beer. To many Germans, their exporting prowess has become a symbol of economic virility, perfectly captured in a sinuous German noun: Exportweltmeister, or world-champion exporter.
It’s as if the nation’s collective chest swells each time the statistics office announces another uptick in trade.
With so much at stake, it’s not surprising that Germany is looking for a way to strike back. Handelsblatt continued:
That said, with trade battles on the horizon, Europe does have a few arrows in its quiver. Already, Brussels and Washington have been engaged in a low-level skirmish, with Europe cracking down on tax avoiders like Apple and targeting online services like Facebook with concerns over privacy and hate speech. These companies are potent allies, for they are as dependent as anyone on Europe’s market of 500 million consumers.
These tensions with America seem to be bringing fresh impetus to Germany’s interest in improving trade ties with China.
Before meeting with President Trump on Friday, German Chancellor Angela Merkel telephoned Chinese President Xi Jinping to coordinate policies ahead of her visit. “It’s a sign perhaps of a shift in the weight of German foreign policy,” Handelsblatt wrote on March 16. Germany is preparing itself for a trade war with America and has shifted its focus toward the East.
The Trumpet has prophesied of an alliance between a German-led Holy Roman Empire and the Asiatic nations of the East for years. Trumpet analyst Brad Macdonald wrote in the April 2017 issue of the Trumpet magazine:
Trumpet editor in chief Gerald Flurry discusses this prophecy in his booklet Isaiah’s End-time Vision: “[W]e believe there may be a brief alliance between the German-led Holy Roman Empire and certain Asian powers (Russia, China, Japan—the kings of the east).” This German-led global trade conglomerate will be a “dynamic market of nations,” he states.
He wrote that seven years ago!
Mr. Flurry also warns that this temporary “mart of nations” is “going to besiege America, Britain and the Jewish nation.” This warning comes from a specific prophecy in Ezekiel 5. Here, God warns that the cities of America will burn with fire caused by riots and mass civil unrest. Millions of Americans will die. This violence will be inflamed by an economic siege—trade wars—inflicted by the resurrected Holy Roman Empire working in conjunction with China and other Eastern nations.
Consider these statements:
“The U.S. and other Israelite nations are surrounded or besieged by fierce and often unfair competition. … As the U.S. and Britain become less and less competitive worldwide, unemployment will steadily increase. … The United States and Britain are going to be left out in the cold as two gigantic trade blocs, Europe and Asia, mesh together and begin calling the shots in world commerce. These nations of Israel are going to be literally besieged—economically frozen out of world trade!” Ezekiel: The End-Time Prophet by Gerald Flurry (request a free copy).
We are clearly in the early stages of the trade war that precedes this siege!
To better understand this shift in alliance and its implications, read Brad Macdonald’s “Trade Wars Have Begun.”