Merkel, Xi agree to work on steel overcapacity

German Chancellor Angela Merkel and Chinese President Xi Jinping discussed overcapacity in world steel markets and agreed on Saturday to work on solutions within the framework of the G20 group of industrialized nations, Merkel's spokesman Steffen Seibert said.


In a telephone discussion, the two leaders emphasized close ties between the two countries, both facing planned US steel and aluminum tariffs, and agreed to deepen their strategic partnership, Seibert said in a statement.

They also underscored the importance of multilateral cooperation on global trade, a pointed response to an accelerating shift away from multilateral action and institutions by the US under President Donald Trump.

Chinese State-owned media outlet the Xinhua News Agency said Xi told Merkel that the two countries should "become advocates for new-type international relations" and become cooperation partners despite their ideological differences, with cooperation to be pushed forward within the framework of the Belt and Road initiative.

"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.

US officials have said they will seek to work with "like-minded" countries at the G20 finance leaders meeting this week in Argentina to push back against China's government subsidies and investment policies.

The Merkel-Xi call came amid tensions between the US, Europe and China over US tariffs.

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, capital of East China's Zhejiang Province, in 2016.

"In this regard, they emphasized the importance of close multilateral cooperation on trade," he said.

Trump has criticized both Germany and China for their trade surpluses with the US since taking office in January 2017. Merkel on Saturday said that Germany's trade surpluses were narrowing due to rising domestic demand and that her government would continue to try and support that trend.


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