Germany's Schaeuble Says He Cautioned Mnuchin Against Border TaxBy and
EU would turn to WTO with any trade violations, Schaeuble says
German minister cites chaotic policy making in Washington
German Finance Minister Wolfgang Schaeuble said he urged U.S. Treasury Secretary Steven Mnuchin to scrap plans for a border-adjustment tax, adding that European authorities would turn to the World Trade Organization over any trade violations.
The two discussed taxes and finance in Berlin last month before a meeting of Group of 20 finance ministers in the German city of Baden-Baden, Schaeuble told an audience at the headquarters of Der Spiegel magazine in Hamburg on Tuesday.
The White House hasn’t explicitly backed the border-adjustment tax, which proponents such as House Speaker Paul Ryan say would encourage exports by taxing domestic sales and imports. U.S. President Donald Trump once called the proposal “complicated,” though some members of his administration support the idea. Schaeuble said its aims aren’t very realistic.
“You could put this system in place if everybody else in the world did it, then it would work -- but everybody else in the world is doing something else,” according to Schaeuble, who characterized his conversation with Mnuchin as friendly.
As an export economy, German companies have bristled at a border-tax proposal that would hurt sales to the the U.S. Schaeuble signaled that the European Union would file a complaint before the Geneva-based WTO if Trump implements a tax that distorts global trade rules.
“We would of course call the WTO,” said Schaeuble, who has been Chancellor Angela Merkel’s finance minister since 2009.
The German minister said the the decision-making processes in the 11-week-old Trump administration appears somewhat chaotic, adding that governing “is apparently a learning process for him.”
Trump says news reports of dysfunction are overblown, and has likened his administration to a “fine-tuned machine” that is already boosting jobs growth amid rising business and consumer confidence.
“Hopefully it doesn’t go on like this for three years,” Schaeuble said. “One might like it or not, but the world does better with a stable United States, which contributes to a certain extent to stability overall.”
— With assistance by Anna Edgerton, and Andrew Mayeda