The U.S. Commerce Department today expressed confidence in the strength of future U.S.-German economic relations, just a few days before U.S. President Donald Trump could make a decision on auto tariffs that could potentially throw the German economy into recession.<\/p>\n
\u201cThe United States and Germany enjoy a strong bilateral economic relationship and cooperate well in areas that affect the investment climate, regulatory environment and workforce development,\u201d the deputy assistant Commerce secretary for manufacturing, Ian Steff, said in a statement after a visit to Berlin for talks with German officials.<\/p>\n
\u201cAmerican companies look forward to doing more business there and are optimistic that further communication on key issues will strengthen our ties,\u201d Steff said.<\/p>\n
His statement comes as Trump faces a decision next week on whether to impose tariffs on cars and auto parts from the European Union to address a national security threat that the Commerce Department found in a report to the president that still has not been released.<\/p>\n
In May, Trump tasked U.S. Trade Representative Robert Lighthizer to enter into talks with both Japan and the EU to address the national security impairment. He has since struck a deal with Japan, but not with the EU.<\/p>\n
On Thursday, a report from the German Institute for Macroeconomics and Economic Research warned a further escalation of trade tensions between the EU and U.S. \u2014 especially if Trump slaps auto tariffs on EU car imports \u2014 could push the German economy into a recession.<\/p>\n
In a worst-case scenario, where Washington imposes car tariffs sparking a spiral of escalation, Germanys GDP would decrease by 0.7 percent, according to the report.<\/p>\n
The U.S. GDP is projected to shrink by 0.9 percent in this scenario. The report, however, argues that since \u201cin Germany a fiscal stabilization will likely be lower, the U.S. could emerge as relative winner in the trade conflict despite absolute losses.\u201d<\/p>\n
There is no word from the White House yet on what Trump intends to do next week. He has a number of options, ranging from imposing tariffs and other restrictions to terminating the investigation without any action.<\/p>\n