Merkel warns of risks posed by rising protectionism

Angela Merkel, the German chancellor, has warned of the risks posed by rising protectionism as Donald Trump prepares for his inauguration as US president.

Mr Trump, who is due to be sworn into office on Friday, made criticism of globalisation one of the central pillars of his election campaign. He has vowed to pull the US out of the Trans-Pacific Partnership, an Asia-Pacific trade deal negotiated by President Barack Obama, and threatened heavy penalties for carmakers choosing to produce cars in Mexico for the US market.

In a podcast released at the weekend Ms Merkel said "protectionist tendencies" were one of the main risks to Germany's economy, which is heavily dependent on exports. "This will be a theme in our presidency of the G20, " she said, referring to the club of big economies that Germany will chair this year.

Asked about protectionism in the US at a press conference later on Saturday, Ms Merkel said she was convinced that countries benefited when they tried to solve problems as partners, rather than on their own, citing the international response to the global financial crisis as an example.

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Slow growth

Ms Merkel, who has led Germany since 2005, will seek a fourth term as chancellor in elections to be held this autumn, with the German economy performing well, despite the uncertainty provoked by Brexit, and slower growth in China.

The German economy grew at 1.9 per cent in 2016 – its fastest rate for five years – and unemployment is at a record low. Ms Merkel said in her podcast that in parts of the economy a lack of skilled workers rather than a lack of jobs was the problem.

However, the chancellor has acknowledged that despite the favourable economic situation, the election, which will follow votes in France and the Netherlands, is likely to be her hardest yet. Her decision in 2015 to open Germany’s doors to hundreds of thousands of migrants fleeing war in the Middle East has alienated large parts of the electorate. – (Copyright The Financial Times Limited 2017)