German exports will grow by up to 3 percent this year – BGA

German exports will grow by up to 3 percent this year and hit a record high of nearly 1.4 trillion euros ($1.58 trillion), the BGA trade group said, suggesting firms are able to expand foreign business despite trade disputes and Brexit uncertainty.

Imports are expected to increase by 5 percent to reach an all-time high of 1.14 trillion euros in 2019, BGA head Holger Bingmann told reporters in Berlin on Thursday.

The export growth forecast is based on assumptions that an escalation of the trade dispute between the United States and China and a no-deal Brexit can be avoided, the association said.

U.S. President Donald Trump’s threat to increase import tariffs on European cars is also a “massive burden”, Bingmann said, adding that if Trump were to follow through on that, it would damage trade relations with the United States – Germany’s most important export market.

Bingmann criticised Economy Minister Peter Altmaier’s new industrial strategy, which envisages a shift towards a more interventionist policy and aims to tackle the challenges posed by China’s state-driven development strategy.

“A ‘China light’ policy is not an option for us. We must not turn Europe into a fortress,” Bingmann said, adding that the government should fight efforts in Europe to weaken competition and the free flow of market forces.

Bingmann warned against rising Sinophobia in Europe and stressed that Germany had benefitted hugely from China’s rapid economic expansion over the past 10 years.

To counter the negative effects of higher tariffs and other trade barriers, Germany and the European Union should further diversify their export markets and seal more trade deals with other countries in Asia and South America, Bingmann said.
Source: Reuters (Reporting by Michael Nienaber; Editing by Paul Carrel and Michelle Martin)