Economy

Trade Wars II: Now Trump Is Attacking Germany Where It Hurts

Angela Merkel reacting to Donald Trump
Angela Merkel reacting to Donald Trump
Von Jan Dams

BERLIN — Donald Trump's protectionist push is prompting a trade war with the entire world — Germany included, as his announcement last month about steel and aluminum tariffs made abundantly clear. But that, it turned out, may have just the tip of the iceberg. He's now threatening Germany's most important industry: auto manufacturing.

On Friday evening, most German auto industry workers were on their way home for the weekend when Trump's plans leaked. To protect domestic carmakers, the U.S. government wants to raise environmental standards in such a way that it becomes more expensive — especially for foreign manufacturers like the Germans — to fulfill them.


This should increase prices for non-U.S. manufactured cars. The idea, of course, is that more expensive cars don't sell well in the price-sensitive U.S. markets and that U.S. manufacturers will therefore benefit. That the measures would also hurt U.S. consumers, by increasing car costs, seems to be of little concern to the president.

German manufacturers, not surprisingly, are unhappy about the news. "Even if the tendency to foreclosure of markets is currently increasing, protectionism is in no way a means to promote your own economy," the Association of the Automotive Industry (VDA) responded. "With more and more new threats coming our way, we can't keep up with this debate. The recent announcement by the Trump administration shows once again the importance of dialogue with the U.S. and the continuation of international trade talks."

An employee inspecting a Porsche on the assembly line in Germany​ Photo: Marijan Murat/ZUMA

The VDA calls for dialogue and supports the idea of a common transatlantic agreement that can reduce tariff and non-tariff trade barriers — a new edition, in other words, of the failed Transatlantic Trade and Investment Partnership, or TTIP. For now, though, there are no such discussions in the works.

Instead, there are rumors and reports, including from the Wall Street Journal, that Trump has called on the U.S. Environmental Protection Agency to rigorously test vehicles manufactured abroad. For some of those vehicles, that could result in the use of much more expensive parts.

Volkswagen and its infamous diesel exhaust scandal may have played a part in this by giving Trump the perfect excuse for his plans. The German car manufacturer has an estimated 3.5% market share in the U.S.


Complicating matters is that many "foreign" cars are actually assembled in the United States, and vice-versa. Car production has long been a global business. Parts are made in one country and then shipped elsewhere for assembly. The question, then, is where to draw the line; how to define a specific vehicle line as "imported." If Trump goes through with the plan, U.S. authorities will have to answer that question, to decide specifically what does and doesn't define a vehicle as "made in the USA."

The lobby group Global Automakers, which includes the German corporations VW, BMW and Daimler, is raging against Trump's plan. These non-tariff barriers are a "bad idea and a cover for protectionism," the group argues.

For the United States, the move proved to be both a blessing and a curse.

What's more, the United States has been working for decades to reduce such market barriers to its own trading partners. For years, for example, U.S. automobile companies complained about market entry barriers in Japan and South Korea. The fact that the United States itself would come up with such ideas is complete irony.

That said, this isn't the first time U.S. authorities have tried to stymie competition from foreign automobile makers. In the late 80s and early 90s, to protect domestic manufacturers from increasingly popular Japanese cars, the U.S. made imports more expensive. Japanese carmakers, as a result, shifted production to America.

For the United States, the move proved to be both a blessing and a curse. Employment rose. Honda, Toyota and Nissan today operate a total of eleven U.S.-based plants, more than their German competitors, and employ a huge number of people. The end result, though, was even more competition for U.S. automakers like GM and Ford.

If Trump really does attack foreign auto industries this way, the steel and aluminum dispute may turn out to be just a prelude to a much greater policy shift. America's trading partners, in that case, must prepare for the worst — and not just China.

The question is: What kind of deal would Trump be ready to accept to spare the auto industry? Keep in mind that the U.S. president routinely confuses trade issues with other topics. In the steel and aluminum dispute with Europe, for example, he called for an increase in military spending by the European partners in NATO.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
Geopolitics

How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

Laura Valentina Cortés Sierra

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.


But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Juthatip Sirikan speaks in front of democracy monument.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
THE LATEST
FOCUS
TRENDING TOPICS
MOST READ