Published On: Wed, Oct 2nd, 2019

US news: White House cuts spending at German embassy as relations cool | World | News

Ambassador Richard Grenell said the mission was £11.4 million under budget for 2019 and would not be requesting a further cash allocation before 2021. The embassy in Berlin, which oversees diplomatic outposts in Düsseldorf, Leipzig, Hamburg, Frankfurt and Munich, insists it can still carry out its functions.

Mr Grenell said: “I believe strongly that American taxpayers expect efficiency and frugality from overseas missions.

“Through continuous analysis of our operations and goals, we have been able to meet emerging requirements through efficiencies and reprogramming existing resources as needed.”

Relations between Washington and Berlin have become strained over issues ranging from trade policy to defence spending.

US President Donald Trump has been a fierce and regular critic of Germany’s failure to meet the 2 percent NATO spending target and has threatened to slap tariffs on German cars.

Officials fear the rift highlighted by the embassy’s spending cuts could have global repercussions.

In April the US Trade Representative’s office published a provisional “long list” of EU products that could face 100 percent tariffs.

The £20 billion list includes civilian helicopters, passenger jets and aircraft parts made in Germany, France, Spain and the UK, but also agri-food products from across Europe, together with consumer items like carpets, knives and luxury handbags.

Trade experts, economists and business groups alike have long argued that the introduction of further trade barriers will be damaging to both sides.

Luisa Santos, director for international relations at the BusinessEurope advocacy group, said: “We already see a slowdown with trade, a slowdown of investments because of a lot of uncertainty.

“More tariffs will increase that amount of uncertainty.”

Guy Ryder, director general of the UN’s International Labour Organisation warned trade tariffs between the US and Europe would precipitate a “snowball effect” and the world may soon enter “very precarious waters” if we don’t acknowledge the benefits that stem from international cooperation.

Speaking at a trade-focused conference in Brussels, Mr Ryder said when world leaders threaten retaliatory measures, business owners and workers lost confidence in the benefits of trade and trust was eroded.

He said: “I can’t think of a time when people felt more uncertain about their futures. Unpredictability has dripped into our political life, as well as our economic and social interaction.”

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