German VDMA Criticizes Trump's Allegations
On the occasion of the German Chancellor Angela Merkel’s visit to Washington, VDMA President Carl Martin Welcker stepped up to a public defense of Germany's machinery export success, saying it reflects German skill and innovation, not unfair trade. At a March 17 meeting with the German Chancellor, President Donald Trump said that German trade officials have "done a far better job" in negotiating agreements and that he wanted to "even it out." Trump aides, for their part, have said German exports benefit from a "grossly undervalued" euro.
"The allegations voiced by US President Donald Trump and his advisors against German industry are missing their mark. For one, German mechanical engineering companies are widely active in the USA and create local added value", he said. According to the US statistics available, a total of 81,000 staff is employed by American mechanical engineering companies that are majority-owned by companies from Germany. They generate turnover equivalent to nearly 30 billion euros, which is twice as much as German machinery exports to the USA in the same period.
Welcker stressed that VDMA member companies’ success in the export sector has nothing to do with wage dumping or currency manipulation, given that wages in the German mechanical engineering sector are actually at the highest level in global comparison. "In fact, our industry’s export strength is a sign of the high quality and innovativeness of mechanical engineering companies in Germany. And it is precisely this quality that secures the competitiveness of the American industry. Many sectors in the USA, such as the aerospace and automotive industries, rely on machinery and components from Germany and Europe in order to be able to produce according to the state of the art."
According to Welcker's statement, imports cover a good third of the volume of the American machinery market. In 2016, machinery imports from Germany came in third place in the import ranking, on par with Mexico. He is convinced that restricting the free movement of goods – be it through punitive or protective tariffs, changes to the tax system or by artificially reducing exports from Germany – would be very harmful to all American citizens. "Walls, punitive tariffs and import duties would inevitably lead to investors backing off. It is also highly doubtful that this protectionism will succeed in breathing new life into the fallow industrial regions that count on Trump’s promises.”
VDMA Verband Deutscher Maschinen- und Anlagenbau e.V.
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