"Danger of de-industrialization in Germany is real"

WORLD: Mr. Klingbeil, you held political talks in Washington and New York for three days. What is your conclusion?

Lars Klingbeil: I was concerned with three issues. First, an analysis of the midterm elections and how the results affect US-Ukraine policy. Second: Our transatlantic relations, of course now also shaped by Russia's war.

Third: Joe Biden's industrial policy, based on the Inflation Reduction Act. Here I have described our concerns. The USA must know that its industrial policy can lead to new competition with Germany and Europe.

WORLD: We will come to industrial policy later. German politicians like to point out that Washington praises Berlin's "turning point". But what is more interesting is: What critical questions did you encounter in relation to this?

Klingbeil: Government representatives have told me how happy they are about the cooperation between the two governments. The West has moved closer together with the war in Ukraine. Joe Biden has had similar talks with the Chinese President as Olaf Scholz before him. We both want China to take a clear stance on Russia's war.

I tended to hear critical questions from the think tanks, such as: How sustainable is the turning point? How durable is Germany's foreign and security policy engagement? How much money is there for defense?

WORLD: And?

Klingbeil: Nobody knows how the US presidential elections in 2024 will turn out. This is one of the reasons why Europe must become more independent and mature. Germany has a decisive leadership role to play here.

WORLD: The United States has spent more than three percent of its economic power on defense for many years. Have you met calls to do the same?

Klingbeil: Of course, the Americans would be happy if we invested even more in defense than planned. But you can see very well what a big step we are already taking with the special fund of 100 billion euros for the Bundeswehr and by meeting the two percent target in the future.

WORLD: The guideline value of two percent is just "what we would expect from allies," says US Secretary of Defense Lloyd Austin. "We encourage going beyond that two percent."

Klingbeil: We'll reach two percent, we'll spend 100 billion euros, we'll reorganize procurement. This is how we strengthen the Bundeswehr. We do a lot more than we used to. Where there is still room for improvement: Europe must work more closely together. It is unacceptable that 27 EU states each have their own security policy and do not coordinate sufficiently.

But the turning point has more than just a military component. Olaf Scholz works day and night on international alliances. There was an impressive alliance against Russia at the G-20 summit.

WORLD: The Biden government is well-disposed towards Europe and NATO. Is Germany prepared for a Europe and NATO-critical US President from 2025?

Klingbeil: Every day we are grateful for Joe Biden's presence in the White House. But we have to be prepared for the fact that things could change. Europe must prepare for this scenario. We still have two years left.

WORLD: What do you think are the “true values” that connect Germany and the USA?

Klingbeil: We have a lot to thank the Americans for. Think of the liberation in 1945, the reconstruction that enabled us to return to the international community. Our culture unites us, but above all values ​​such as democracy and freedom of expression.

WORLD: What do you feel when you walk the streets in New York or Washington?

Klingbeil: I lived in New York and experienced the attacks of September 11, 2001 there. That shaped me as a young student back then. I also lived in Washington once. I like this country, even if it ticks differently than Germany. The political culture is very different from ours.

WORLD: What do you think of Biden's strict protectionist policy? There are only subsidies for e-cars in the USA if they are completely manufactured in the USA...

Klingbeil: In the USA, the state is now making massive industrial policy. There are indeed protectionist tendencies. At the end of the day, it shouldn't be that the USA is pursuing an economic policy against us Europeans, although they actually want to hit China. We should be confident in voicing our concerns. Germany cuts itself off from Russia, we want to reduce China's influence, our energy prices are high.

All of this will challenge our industry enormously. So it's not good if our greatest ally is also aligning its economic policy against us.

WORLD: What do you mean by "economic policy against us"?

Klingbeil: The buzzwords in the USA are “Buy American” and “Made in America”. The US does not differentiate between bringing jobs back to their country from China or from Europe. That does not work like this. I hope that the form of the Inflation Reduction Act will be changed.

WORLD: Energy prices in the USA are low, and there are also subsidies. Do you fear that German industry will migrate to the USA?

Klingbeil: There are these signals from German industry. Let's not kid ourselves: the danger of de-industrialization in Germany is real. The supply chains are broken in places, we have a shortage of skilled workers and high energy prices. That is why some companies make investment decisions against Germany.

If even the Federation of German Industries is now calling for a strong state and investments, then that shows that the market and the state must cooperate closely. This is already happening in the US.

WORLD: France speaks of a “trade war” with the USA. Are the Europeans pulling together?

Klingbeil: I will not adopt this term as my own. And as far as a European economic policy is concerned, more is certainly possible. Just one example: we need one capital market in Europe, not 27 different ones.

WORLD: Who would have thought? The SPD leader is disappointed that the capitalist USA is pursuing an industrial policy and decreing state intervention.

Klingbeil: (smiles) I'm always happy when clever social democratic ideas prevail - and I hope that they do the same in Europe.

WORLD: When will there be a new attempt at a transatlantic trade agreement? Your party vigorously opposed the last attempt.

Klingbeil: I have said several times in the USA that we are ready for this. My impression is that there is less interest in the USA than in Europe. There will be no TTIP 2.0. But we should talk about new trade agreements.

WORLD: China has been Germany's most important trading partner for six years. The Biden government is much more critical of Beijing than Chancellor Scholz. Have you been criticized for this?

Klingbeil: I heard praise for Olaf Scholz' trip to China. Especially in view of President Biden's meeting with Xi. In quick succession, both prompted China's head of state to condemn the use of nuclear weapons. These conversations are important. We also have to talk to states like China. Foreign policy is more than just outrage.

For our future China policy, I have the clear premise that we keep China out of security-relevant areas. We must not allow one-sided dependence like with Russia. We need to be able to flip the switch at any time. If China should attack Taiwan, we have to be able to do without China in the shortest possible time.

WORLD: But it doesn't cost China anything if it now warns about nuclear weapons.

Klingbeil: That's a clear statement for Russia. Putin thought he had many countries behind him.

WORLD: Why is the federal government largely silent on the human rights violations against the Uyghurs?

Klingbeil: Olaf Scholz addressed the issue in Beijing. The chancellor is clear on that.

WORLD: Why is Germany not supplying battle tanks to Ukraine?

Klingbeil: Because we consciously say that we don't go it alone. No western country supplies main battle tanks. We supply tanks of Soviet design via ring exchange. We are the third largest arms supplier to Ukraine.

WORLD: What is your favorite place in the USA and which place would you like to visit for the first time?

Klingbeil: Definitely New York. Everything I experienced here in the days after "9/11" bound me deeply to this city. Otherwise I would like to spend a few days away from the big cities. I think if you talk to the people there, you learn a lot about the country.

"Kick-off Politics" is WELT's daily news podcast. The most important topic analyzed by WELT editors and the dates of the day. Subscribe to the podcast on Spotify, Apple Podcasts, Amazon Music or directly via RSS feed.