Merkel woos China as Trump poses new trade challenge

China said on Thursday it would “open its door wider” to German businesses, helping visiting Chancellor Angela Merkel defend free commerce and counterbalance trade threats from U.S. President Donald Trump that are testing transatlantic ties, Reuters reports.

Germany and China, two exporting nations that run large trade surpluses with the United States, have found themselves in Trump’s firing line and are scrambling to preserve the rules-based multilateral order on which their prosperity rests.

Merkel faces a delicate balancing act on the China trip, her 11th since becoming chancellor in 2005, as she seeks to show Chinese-German solidarity over free trade and the Iran nuclear deal without harming German ties with long-term ally Washington.

In the latest U.S. trade move that has alarmed Beijing and Berlin alike, the Trump administration announced on Wednesday a national security investigation on into car and truck imports that could potentially lead to tariffs.

The announcement hurt share prices of both European and Asian carmakers. China vowed to protect its interests.

European countries are also concerned that their exporters could be hurt if China instructs importers to buy more U.S. goods to ease trade disputes with the Trump administration. China has already signaled to state companies to buy more U.S. oil and soybeans, trade sources told Reuters.

Premier Li Keqiang, in a joint media appearance with Merkel at Beijing’s Great Hall of the People, said China and Germany both upheld global free trade, and stressed the huge potential for cooperation between them.

Though the two countries had problems, they could be overcome, Li said. “China’s door is open. You can say it will open even wider,” Li said, standing next to Merkel and stressing “friendly relations” with Germany.

Trump’s “America First” trade policy, his administration’s professed disdain for the World Trade Organization, as well as his withdrawal from the Iran nuclear deal, have pushed China and Germany into closer alignment, German officials say.

However, Merkel’s government also shares many of the Trump administration’s concerns about Chinese business practices, including what many Western countries have complained are state-backed efforts to pressure foreign companies into giving up trade secrets.

This article provided by NewsEdge.