The United States is an important trading partner for Germany. However, protectionist policy proposals are a matter of growing concern for German companies.
The election of Joe Biden as the next US President was celebrated with great acclaim within the international community. The history of US trade policy shows that many Democrats, as US presidents, have succeeded in accelerating the trade liberalisation process.
It's true: the U.S. national debt and current account deficit continue to rise – the domestic savings rate was -1.2 percent in the second quarter of 2020. The dollar's share in global foreign exchange reserves has fallen by over 10 percentages points since 2000 to below 6 percent.
The American elections in November 2020 will be of great importance not only to the US itself, but also to Europe and Germany. While transatlantic cooperation has suffered under the current administration, a change of government has the chance for a new beginning.
The USA is at the beginning of an election year. The elections on November 3, 2020 will have a formative influence on the transatlantic relationship and on global cooperation structures in a wide range of topics.
In this episode of The Zeitgeist, Michael Hüther, Director of the German Economic Institute, joined AICGS President Jeff Rathke and Senior Fellow Peter Rashish to talk about what Hüther calls the end of the second era of globalization and the challenges of shaping the third era of globalization, creating a European and an international framework that is politically sustainable and economically effective.
In contrast to a massive current account deficit against China, the US runs a current account surplus with respect to the European Union. The US-EU surplus is largely driven by a positive service balance and primary incomes originating from US investments abroad. Services and primary incomes overcompensate the US goods trade deficit with the EU. Rather than representing a “rip–off”, the different balances reflect the economies’ different business models.
For several years now the number of listed companies in Germany and other industrialised countries such as the United Kingdom and the USA has been declining, with de-listings significantly outnumbering flotations.
How does the EU Commission’s idea of closer scrutiny of Chinese investments into European companies square with the same Commission’s advocacy in favour of open markets and free movement of capital? It is a delicate balance to strike between intervention and free markets. The EU needs to be careful not to lose credibility and scare away foreign investors which could endanger the many advantages of inflowing foreign direct investment.
After the internet bubble collapsed in 2000, German households have reduced their investments in the stock market. Losses at that time were not so much caused by market volatility, but the consequence of short-term speculation. However, putting savings into the stock market can be very profitable for households, when the investment horizon is sufficiently long.
At this week’s G20, global trade will come into the spotlight. It will present EU leaders with the daunting task of juggling economic sanity and political reality, write Ilaria Maselli and Jürgen Matthes for Euractiv. Ilaria Maselli is a Senior Economist at The Conference Board. Jürgen Matthes is a Senior Economist at the Cologne Institute for Economic Research. They are the co-authors of the new report, Ensuring Accountability in Modern Trade Policy.
Senior Economist, Head of the Research Group Macroeconomic Analyses and Business Cycles
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