The business community in Germany is watching the midterm elections in the U.S. with great interest.
Gov. Phil Murphy spent the day Tuesday repeatedly addressing concerns about the federal government, while he tried to pitch the state for interested companies.
But some business advocates in the country are more interested in another part of the globe. Feeling a void left by the U.S. in global trade talks, they were interested in discussing how Europe could strengthen its ties with Asia.
It’s not the message Murphy wants to hear on his nine-day trade mission, but one Joachim Lang, CEO and member of the board of management of the Federation of German Industries, discussed during a roundtable hosted at Bayer in Berlin.
“We see that China is challenging the Western system by its own system,” he said. “We were always convinced democracy was the best system to export. But, now, we see the way it’s interpreted by the administration and we are not convinced this model will be the export model for the rest of the world.”
Lang said President Donald Trump’s economic actions are making some give the U.S. system of government a second look.
“The more instruments someone has, like the U.S. president, to use on an uncontrolled basis, the more dangerous it is for the rest of the world doing business with the United States,” he said. “In my opinion, the United States are undermining their position in the rest of the world.”
Lang said that was evident when the U.S. was one of the main reasons the Trans-Pacific Partnership was not put in place.
“Diplomats that have been working on this for decades, and, now, at the moment when you could … cash in for what you have worked for, for so many years, the United States leaves the TPP, which was meant also as part of containment of the new power rising in Asia,” he said.
Lang said the rest of the world saw that. Which is why, he said, for the first time in its 12-year history, the annual Asia-Europe Meeting is drawing heads of state of 51 European and Asian countries.
“(It) was not the issue a few years ago,” he said. “It was done by ministers of foreign affairs.
“This year, it is done by heads of states because Europe realizes, and Asia realizes, the relationship between Europe and Asia becomes more important because of the situation in the United States.”
Murphy said backing out of the TPP was a historic blunder that the U.S. will pay a price for.
“We are seeing a failure of one-party rule,” he said. “Sometimes, it works; sometimes, it doesn’t. If Democrats take over, our party will be harder on Russia.”
Murphy said he hasn’t been able to sway federal policy-making, but said he is able to sue the government and mitigate damage to New Jersey through state actions.
Even more, Murphy said, Trump is not deep-seated in a particular view. He said it is possible that he may shift his views if the makeup of Congress shifts, which is why the midterm elections are so important.
“I don’t agree with his approach even with China, but I certainly don’t agree with picking a fight with our closest allies in the EU, beginning with Germany,” Murphy said. “If you think there are global trade imbalances, and I would submit to you that there are, I don’t understand the logic of the process by which they are trying to level those imbalances.”
Lang also said the policies Trump and his administration are putting in place are not sustainable — even if they are seeing short-term gains in the market.
Worse, Lang said, is the effect of Trump’s policies are having on global relationships.
Congresspeople have told Lang that the U.S. system of checks and balances is not working.
“This is what we really fear,” Lang said. “This very old democracy doesn’t work the way it used to, and there is no system of checks and balances, so there is no one controlling the president. The more instruments like sanctions and tariffs he uses, the less important Congress is.
“The situation that other countries have to focus on is that this doesn’t go away in the short term. And this does really harm, not only to international business, but it also to the idea of democracy in the world.”