Germany would be major loser of global trade war: experts

BERLIN, April 5 (Xinhua) -- Germany would suffer heavily from a global trade war despite being excluded from the recently-proposed U.S. tariffs, Frankfurter Allgemeine Zeitung (FAZ) newspaper reported Thursday.

FAZ cited Marcel Fratzscher, president of the Berlin-based German Institute for Economic Research (DIW), who warned against false complacency on behalf of domestic policymakers and firms. Given Germany's strong developmental focus on export-driven growth in a world of globally-integrated supply chains, the country would be "the big loser" of a trade war.

According to Fratzscher, even major exporters would not benefit from a direct trade confrontation between the United States and China, because Germany produced different types of goods compared to the two countries and thus rarely stood in competition with them for export markets. In the short-term, German businesses were likelier to experience damaging price instability than a boost to their fortunes.

"A significant cooling of global and German economic momentum would be the inevitable result of an escalation of the international trade conflict," Fratzscher warned.

Similarly, Dennis Snower, president of the Kiel Institute for the World Economy (IfW), said the risk of companies reducing their investment in reaction to a trade war would in turn lower growth rates. The European Union (EU) would suffer as well because the United States and China were two of its most important trading partners.

Under President Donald Trump's directive, the U.S. Trade Representative's office Tuesday unveiled a list of Chinese products on which it threatens to slap 25 percent import tariffs. The list contained 1,333 items worth some 50 billion dollars in 2017, targeting mainly hi-tech and innovation sectors.

Hours after Washington announced its proposed punishment, China hit back proportionally by rolling out its version of the list comprising 106 items involving key American exports to China, such as soybean, automobiles, aircraft and chemicals. Beijing said it would slap a 25 percent duty on those products, also worth 50 billion dollars annually, as retaliation should Washington carry out its plan. Enditem