Germany rebuffs Obama on trade gap

From the Washington Times - By Patrice Hill - German Chancellor Angela Merkel on Thursday rejected a U.S. proposal to try to cap global trade imbalances while the world's other export powerhouse, China, shunned U.S. calls for speedier economic reform. In one-on-one meetings with the heads of the U.S.'s biggest nemeses on trade issues at a Group of 20 economic powers meeting in Seoul, President Obama pressed his case for trying to curb ballooning trade deficits and surpluses to help prevent another financial collapse like the one that toppled the world economy in 2008. But Mrs. Merkel shut the door on any concrete commitment from Europe's export engine to limit its large trade surpluses to 4 percent of economic output — a proposal floated by the U.S. in behind-the-scenes negotiations. "To set political limits on trade surpluses and deficits is neither economically justified nor politically appropriate," the German leader told a G-20 business summit. At her meeting with Mr. Obama, the German leader repeated concerns about the Federal Reserve's controversial decision last week to buy $900 billion of U.S. Treasury debt in the next six months. European officials worry the move will provoke a round of inflation and destructive currency devaluations. Read more

Germany rebuffs Obama on trade gap