GERMAN Chancellor Angela Merkel defended her country’s trade surplus at the weekend, insisting that Berlin is working to encourage domestic demand but that not all factors are under its control.

Her Economy Minister Peter Altmaier flew to Washington today for talks with US President Donald Trump’s administration, which has criticised Germany’s trade surplus.

Chancellor Merkel said domestic demand has been growing, helping narrow the German trade surplus to €244.9 billion (£216bn) in 2017.

She said fluctuations in oil prices and exchange rates were outside Germany’s control and trade surpluses also “show that our products are in demand.”

President Trump has announced US tariffs on steel and aluminium imports and the European Union published a list on Friday of US products it plans to target if not exempted from US tariffs.

Ms Merkel discussed overcapacity in world steel markets in a phone call with Chinese President Xi Jinping on Saturday, agreeing that both would work on solutions through the G20 group of industrialised nations.

Chinese state news agency Xinhua said President Xi had told Chancellor Merkel that their countries should “become advocates for a new-type of international relations” and co-operate as partners despite ideological differences.

“China-Germany relations will steadily proceed for 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,” the Chinese leader stressed.

A key G20 summit opens this morning in the Argentinian capital Buenos Aires with steel production on the agenda.