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Euro Rises On Strong Economic Growth In Germany

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How about having a different conversation, such as: (a) Do Europeans understand that their large and systematic trade surpluses with the U.S. are wrong, unfair and damaging to the U.S. economy?; (b) If they do, what corrective measures, and over what period of time, are they prepared to undertake to balance their trade accounts with the U.S.?

That sort of conversation should begin, and end, at the highest level of state and government, with the understanding that the relief is being sought among close allies, in an atmosphere devoid of taunts, threats and other unseemly behavior. It should, however, leave no doubt that the Europeans are being asked, firmly, to square their U.S. trade books as promptly as possible.

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That is not a naïve choir-boy approach. It is an entirely appropriate entry level discourse, recognizing the simple evidence that the Europeans have a problem, and that they cannot avoid taking action to solve it.

Arguments advanced by the Europeans and the Chinese that America's fair and reciprocal trades would undermine multilateralism and globalization should be put aside. They are talking forum (e.g., G-20) discussions for another day.

The here and now issue is that Washington has a $595.4 billion problem with China, the EU and Japan. That is an urgent matter whose friendly and orderly solution does not require any regulatory changes to the current world trading system.

Once the political agreement is reached on a decision to balance trade accounts, and on a specific time-frame to reach that objective, trade negotiators could be given instructions on the way to proceed. The key proviso being that the White House, and its counterparts in China, the EU and Japan would continue to closely monitor, and steer, the unfolding trade adjustment process.

But Washington has taken things the other way around. That's clear in the case of China.

Instead of settling things at the highest political level, the U.S. hit China with import tariffs, forcing Beijing to respond in kind. And then, to limit the political and economic fallout, Washington last week sent State Secretary Mike Pompeo to Beijing in a damage-control exercise.

At the same time, President Donald Trump was gushing with declarations of friendship for Chinese President Xi Jinping, praising China's help with efforts to rid the Korean Peninsula of nuclear threats.

Xi, most probably, does not believe a word of that. He has no illusion about who the adversary is. He was busy last week inspecting naval assets, exhorting his elite marine troops to get ready to defend China and exchanging messages of "strategic coordination" with his real friend at the Kremlin.


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Source : https://www.cnbc.com/2018/06/17/the-us-should-break-german-lock-on-the-european-economy--commentary.html

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