China, Germany agree to work on steel overcapacity within G20 – report

German Chancellor Angela Merkel and Chinese President Xi Jinping have discussed overcapacity in world steel markets and agreed to work on solutions within the framework of the G20 group of industrialised nations.

The two newly re-elected leaders, both facing planned U.S. steel and aluminium tariffs, have agreed to deepen their strategic partnership, a statement by Merkel’s spokesman Steffen Seibert said.

Chinese state news agency Xinhua said Chinese premier Xi told Merkel that the two countries should “become advocates for new-type international relations” and become cooperation partners despite their ideological differences.

“China-Germany relations will steadily proceed far as long as they adhere to equality and mutual respect, understand and care for each other’s core interests and major concerns, and properly control and handle their differences,” Xinhua said, attributing the comments to Xi.

Merkel and Xi “discussed the problem of global overcapacities in the steel market and backed continued efforts to work toward solutions in the framework of the G20 Global Forum (on Steel Excess Capacity),” Seibert said, referring to a body initiated at the G20 summit in Hangzhou, China, in 2016.

Trump has criticised both Germany and China for their trade surpluses with the United States since taking office in 2017.

U.S. officials have said they will seek to work with “like-minded” countries at the Group of 20 finance leaders meeting early next week in Argentina to push back against China’s state subsidies and investment policies.

Merkel said last week the planned U.S. tariffs violated the principles of the World Trade Organization and the dispute should be resolved via talks if possible.

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