With friends like these, the saying goes, who needs enemies?
America’s European allies may be starting to feel this way about the United States.
Donald Trump has shown a special knack for starting diplomatic spats with long-time US allies — the United Kingdom, Australia, Canada and Mexico all found themselves on the president’s erratic firing line within his first couple of months in office.
This time, Germany is the new enemy, after a recent visit to Europe left leaders there despondent about US relations and prompted German Chancellor Angela Merkel to make the unprecedented statement that Europe could no longer fully count on the United States as an ally.
Rather than letting things cool, Trump ratcheted up tensions upon his return with the following tweet, which not only constitutes shoddy diplomacy but also belies a lack of understanding of both economics and geography:
We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military. Very bad for U.S. This will change
— Donald J. Trump (@realDonaldTrump) May 30, 2017
There are several problems with Trump’s focus on the trade deficit with Germany. First, bilateral trade deficits are generally not particularly useful indicators of countries’ economic performance in relation to others. More importantly, Germany is part of the European Union, and therefore trades with the United States and other nations as a bloc. That makes its bilateral trade deficit with the United States even less relevant.
Germany is also a member of the euro zone, which means the European Central Bank, not the German Bundesbank, sets monetary policy, undermining claims by members of the Trump team that Germany was somehow manipulating its currency to maintain a competitive exporting edge.
The thing is, there is a widespread complaint about Germany, shared not only by the administration of ex-President Barack Obama but also many European states: The country saves too much and spends too little, creating internal economic imbalances that make it harder for struggling countries elsewhere in Europe to compete. Trump could have seized on that to make a case for a more positive German contribution to the world economy.
Germany bad, America good. That’s best Trump could do. No wonder Merkel was left with such little confidence. When it comes to leading the free world, she knows it’s up to her now.
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