Germany Warns U.S. Against Ceding Lead Role to China, Russia

(Bloomberg) —

Wolfgang Schaeuble, Germany’s veteran finance minister, urged the U.S. to limit Russian and Chinese influence or risk bringing about “the end of our liberal world order.”

The comments by Schaeuble, a member of Chancellor Angela Merkel’s Cabinet since she took office in 2005, are one of the strongest expressions of concern among European policy makers that President Donald Trump’s administration is disengaging the U.S. from its global role on trade, climate change and security. Europe and the U.S. must stand together at a difficult time, the minister said.

“I doubt whether the United States truly believes that the world order would be equally sound if China or Russia were to fill the gaps left by the U.S., and if China and Russia were simply given a free hand to dominate the spheres of influence that they have defined for themselves,” Schaeuble, 74, said in a speech at the American Academy in Berlin, a think tank that promotes U.S.-German ties. “That would be the end of our liberal world order.”

Schaeuble’s remarks to an audience that included former U.S. Secretary of State Henry Kissinger and former Treasury Secretary Lawrence Summers came less than three weeks before Merkel hosts Trump, Russian President Vladimir Putin, Chinese President Xi Jinping and other Group of 20 leaders for a potentially difficult summit in Hamburg.

Merkel set the tone after meeting Trump at the Group of Seven summit in Sicily in May, saying reliable relationships “are to some extent over.” Her latest call for defending free trade came on Wednesday at a celebration of U.S.-German ties since World War II.

Protectionism and isolationism “impede innovation, and in the long run this is disadvantageous for everybody,” Merkel said at a Berlin event marking the 70th anniversary of the Marshall Plan, the postwar U.S.-funded initiative to rebuild Western Europe. “I’m a supporter of open markets.”

Trump’s moves to pull out of the Paris climate accord, reduce U.S. Pacific trade ties and call U.S. financial commitments to the North Atlantic Treaty Organization into question risk leaving a void in global leadership. That’s creating an opening for China, a country Merkel has embraced as an ally in combating climate change. China was Germany’s biggest non-European trading partner last year, ahead of the U.S.

Schaeuble, who helped negotiate German reunification that led to the European Union’s expansion to the east, drew a link between U.S. complaints about Germany’s trade surplus and the need to guarantee Europe’s security.

“It is surely in the United States’ own interest to ensure security and economic stability in its markets, both in Europe and around the world,” he said in his speech late Tuesday. “This is a basic precondition if the U.S. wants to increase its exports and cut its trade deficit.”

In another sign of shifting geopolitics, Merkel said Tuesday she’s open to discussing proposals for a joint euro-area budget, which French President Emmanuel Macron has backed.

Comments by Merkel and Schaeuble, who also is Germany’s longest-serving member of parliament, carry additional weight as Europe’s biggest economy heads toward a national election on Sept. 24 where Merkel is seeking a fourth term.

Combined support for their Christian Democratic Union and its Bavarian ally, the Christian Social Union, increased 1 percentage point to 39 percent in a Forsa poll published Wednesday. The Social Democrats led by Martin Schulz, Merkel’s main challenger, declined 1 point to 23 percent. If the result is replicated on Election Day, Merkel would be set to stay in power, though she’d need a coalition partner as during her previous terms.

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