The German automotive trade organization VDA has raised its forecast for auto sales growth this year, even as the sector continues to struggle with the effects of the diesel crisis and the impending trade war, Reuters reports.
VDA now expects Germany’s passenger car market to grow by 1% to about 3.5 million cars this year from a previous forecast of 3.4 million.
“Despite economic and political uncertainty, the German automotive industry remains strong,” VDA President Bernard Mattes told reporters at a press conference.
In June, sales of new cars increased by 4% compared with the previous year.
German automotive industry is threatened by U.S. President Donald Trump’s intention to impose a 20% tariff on all imports of cars assembled in the European Union.
Mattes urged politicians to find a transatlantic compromise that would force the US and Europe to abandon the idea of introducing tariffs, and would also comply with the rules established by the World Trade Organization (WTO).
“But if the United States, however, will unilaterally raise tariffs, there must be an answer,” he said.
Secretary of the Treasury denies allegations of US withdrawal from WTO
Threats attributed to Trump to leave the WTO are fake news, said Stephen Mnuchin. At the same time, the US president is concerned about the situation in the WTO. US Treasury Secretary Stephen Mnuchin on Friday, June 29, denied allegations of a possible US withdrawal from the World Trade Organization (WTO). Attributions to U.S. President Donald Trump of intent to leave the WTO are “fake news,” Mnuchin said in an interview with Fox Business Network.
At the same time, Trump is concerned about the situation in the WTO, the head of the US Treasury noted. According to him, the US is focused on “free trade” and “removing barriers”, while China and other countries use the WTO for their own purposes.
Earlier, Trump’s threats to pull the US out of the WTO were reported by the online publication Axios, citing an insider. According to him, economic advisers to the US president opposed such statements. To exit the WTO, Congressional approval is needed, the source said.
Head of Munich Security Conference calls on Berlin to increase defense budget
Germany must invest in security “not because Trump requires it, but because we ourselves consider it important,” says Wolfgang Ishinger. Experts advise doubling the defense budget. On the eve of the NATO summit, which will be held in Brussels on July 11-12, the chairman of the Munich Security Conference, Wolfgang Ischinger, urged Berlin to increase its defense budget. “You can argue for how long the NATO countries’ agreement should devote two percent of GDP to defense, but the truth is that we agreed to such a goal, ”Ishinger said in an interview with the newspaper Die Welt, published on Saturday, July 7. “Therefore, it is regrettable that in the ruling coalition it could not be agreed upon.”
Germany should take the necessary measures to improve the security situation “not because Trump requires it, but because we ourselves consider it important,” the diplomat is sure. Earlier, US President Donald Trump repeatedly demanded that Berlin increase financial support for the North Atlantic Alliance.
Experts advise Berlin to double defense budget
Meanwhile, according to Der Spiegel, citing a study by the German Society for Foreign Policy (Deutsche Gesellschaft für Auswärtige Politik) and the Science and Politics Foundation (Stiftung Wissenschaft und Politik), experts are confident that Germany should increase defense spending to 85 billion euros by 2024. According to experts, for this it is necessary to increase the defense budget by 6.8 billion euros annually. In this way, Berlin will be able to reach 2 percent of GDP, which the NATO countries agreed in 2014, and will occupy the second place in the alliance after the United States in terms of defense spending, Der Spiegel explains.
Recently, the German government approved a draft federal budget for 2019, which provides for defense spending of 42.9 billion euros, which is 1.31 percent of GDP and about 4 billion more than in 2018. In mid-June, German Chancellor Angela Merkel, at a meeting with NATO Secretary General Jens Stoltenberg, promised to increase defense spending to 1.5 percent of GDP by 2025.