09:41 GMT08 August 2020
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    A series of lawsuits brought by the US authorities against German firms are evidence of a trade war between the US and EU, financial expert Ernst Wolff told Sputnik Deutschland.

    The recent troubles of German companies in the US are "no accident," and litigation against Deutsche Bank and Volkswagen are signs that the US government is trying to impede German firms from competing across the Atlantic, Ernst Wolff told Sputnik Deutschland.

    "This must be seen in the context of the decline of the US economy, which is trying to harm one of its main competitors, the EU, and specifically the strongest country within the EU. All these protectionist measures have already started under Obama and they will be tightened under Trump," Wolff warned.

    On Wednesday Volkswagen was fined $4.3 billion, the largest penalty ever imposed on an automaker, after the company pleaded guilty to cheating on diesel emissions tests for a decade. In addition, a US federal grand jury indicted six former VW executives accused of involvement in the scandal, five of whom are in Germany.

    Last week Deutsche Bank agreed to pay $95 million to settle a US government lawsuit alleging that it committed tax fraud in 2000 by using a shell company to avoid paying US federal income taxes.

    In December Germany's biggest bank reached a $3.1 billion settlement with the US Department of Justice to resolve claims that the company mis-sold mortgage-backed securities. The bank will also have to provide $4.1 billion in consumer relief.

    Wolff told Sputnik that these two companies are "big fish" which have been targeted by the US authorities for economic and political reasons.

    "They are particularly big fish. Volkswagen is in competition with major American car companies. It's an ideal target. The Pierch and Porsche families own 50 percent of the company, 20 percent is owned by state of Lower Saxony and 30 percent is owned by investors. With such a large proportion of German investors, one can therefore hurt the German economy in general with attacks against such a company."

    "Things are more complicated at Deutsche Bank because most shares have been floated on the stock market and the largest investor is the American company Blackrock. At first sight, this is self-harm. Nevertheless, Deutsche Bank is being used as a means of maneuver against the German government, in order to force Germany to take certain measures within the EU."

    The analyst said that the US authorities have become more aggressive in their claims against European companies because they "are losing ground at the moment."

    "In the coming years, of course, the US will defend itself against decline with all the means at its disposal. Over the last few years they have printed an incredible amount of money and have a crazy amount of debt. There are huge bubbles in the stock and real estate markets and also in private households: 50 million American cars are bought on credit. So they are trying to at least squeeze some advantages for American companies abroad and play their old power games."

    The US enjoys a commanding position in the world economy because of the hegemony of the US dollar, which has been the world's main reserve currency since the end of the Second World War, Wolff said.

    "The most important thing here is that the US is still exercising its power over the dollar. The global financial system is based on this. The dollar is still the world's leading currency and the most important reserve currency in the world. Even the ECB holds seventy percent of its foreign exchange reserves in dollars. That is why the US can still put pressure on other countries."

    Wolff thinks that this anti-EU "trade war" will continue under the incoming Trump administration. However, there are many differences between the Trump camp and that of his predecessor, which have even manifested themselves in a conflict between the US intelligence services.

    "On the one hand there is the armaments industry, the media and the CIA and they have Trump in their sights because they were against him coming to power. In turn, Trump has Wall Street, the FBI and large parts of the military behind him. There is a huge power struggle between these (sides)."

    "You have to look at Obama's final measures from this point of view. The fact that he is now sending tanks into the former Eastern Bloc states and provoking Russia further is because Trump wants a better relationship with Russia," Wolff said.

    "Or there are allegations about Trump, that he is under the control of the Russians, which is complete nonsense. This has nothing to do with the Russians it's about the American intelligence services. We are currently witnessing a struggle that has been unleashed between the CIA and the FBI."


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