Angela Merkel and Joe Biden set to 'come to blows' in row over trade

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The Democrat’s victory in the US election will represent a new chapter for relations between Washington and Berlin after years of tension. Outgoing President – Donald Trump – was a critic of the EU and a vocal backer of Brexit. But now European leaders are competing for Mr Biden’s partnership as German Chancellor Angela Merkel attempts to charm the President-elect. Mrs Merkel “very warmly” welcomed Mr Biden’s win, and acknowledged that her country needed to take on more responsibility within the trans-Atlantic partnership.

She added: “America is and will remain our closest ally, but it expects more from us — and rightly so.”

Despite optimism in Berlin, experts have warned Germany and the US could still endure differences over trade.

Andrew Kenningham, chief Europe economist at Capital Economics told CNBC in November that he “expects tension” between Mrs Merkel and Mr Biden.

He said: “I expect that there will still be some tensions over trade and economic policy between Germany and the US.

“The EU has plans to more strongly regulate and tax the mainly US tech firms such as Amazon and Google etc. And perennial trade disputes, for example between Boeing and Airbus are not going to go away.

“However, the end of the Trump administration all but eliminates some tail risks for the next few years at least. In particular, there was a possibility that Trump would follow through on his threat to impose tariffs on EU auto exports.”

Despite this, Mr Kenningham added that overall, “the direct economic impact of a Biden presidency on the German economy will be small”.

European Commission President Ursula von der Leyen has even accepted that the EU cannot “go back to the exact same agenda we had five years ago”.

She added: “We should not fall into that trap. We need a fresh approach. Because the world has changed and so have the United States and so has Europe.”

READ MORE: EU divide: Joe Biden sparks row between Merkel and Macron

He said in November: “If Boris Johnson wants a trade deal with the US, the agreement he forged with the EU in late 2019 will have to be observed.

“His current approach will not work, and everyone around Boris Johnson knows that.

“I think there is a trade deal to be struck, but there will have to be painful trade-offs on environmental standards, food safety standards. There will be losers.”



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