Wednesday, May 31, 2017

PolitiFact -- Does the U.S. have a 'massive' trade deficit with Germany, as Donald Trump said?

The answer to the question is yes but not "massive," and it's not problematic.

But the rhetoric President Trump uses and his behaviors are problematic. His remarks on trade “alienates our trading partners, which also happen to be strategic international allies." At the G7 summit, Trump decided not to endorse NATO’s Article 5 mutual defense agreement  and  the 2015 Paris Agreement on the reduction of greenhouse gas emissions, which is an agreement setting a global action plan to put the world on track to avoid dangerous climate change by limiting global warming. Both send a clear message that the United States “is no longer a trustworthy partner not only for matters of trade, but also for matters of international diplomacy. Trade and international diplomacy go hand in hand."

Moreover, There is his outrageous behavior of pushing the prime minister of Montenegro out of his way in order to stand in front of other country’s leaders who had gathered for a group photograph, adjusting his jacket and putting his chin in the air, an arrogant snub that can only be interpreted as look, I am better than you.

Trump’s displayed ignorance of foreign relationships in regard to maintaining a solid foreign policy by calling for our allies to assume more responsibility for their own security, and his “goon display of ignorance of other languages, cultures or even basic manners” are unfitting of any leader of any country, least of all the President of the United States of America.

Germany’s Angela Merkel called her NATO experience with Trump, “six against one discussions very difficult, not to say unsatisfactory.”

Trump is now berating Merkel on Twitter.

“ . . . Merkel said at a May 28 campaign event, ‘The times in which we could fully rely on others are partly over. I have experienced this in the last few days. We Europeans really have to take our destiny into our own hands.’

“Two days later, Trump fired back on Twitter: ‘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.’

“Jeremy Shapiro, research director for the European Council on Foreign Relations at the Brookings Institution, called the trade deficit with Germany ‘large’ but said the word ‘massive’ includes some inappropriate undertones.

" ‘Massive’ in my view connotes that it is inappropriately large or somehow unfair, so I wouldn’t use that term." 

“However, Shapiro and other independent experts say they are worried about the type of rhetoric Trump is using.

" ‘This type of language encourages the population’s worst instincts on trade, is economically illiterate, and could possibly result in tit-for-tat protectionist spirals that would negatively affect U.S. and global prosperity,’ he said.”

Robert Reich calls it “Rubbish.” 

He adds, “Trump is just trying to get even for the negative things Angela Merkel and the German foreign minister had to say about him over the weekend -- which were entirely justifiable. Trump’s refusal to endorse NATO’s famous Article 5, the guarantee of mutual defense, at the NATO summit, combined with his refusal to join the Paris climate accord, made his trip a catastrophe.

“As to Trump's morning tweet, he's wrong both on substance and on politics. Substantively, Trump (and his obtuse trade adviser, Peter Navarro) assume Germany wants a weak euro when, in fact, Germany has been critical of the European Central Bank’s quantitative easing policy that’s helping hold down the euro.

“Germany also saves a big chunk of what it earns, resulting in more money flowing out of Germany in search of investments around the world (capital outflows) into places like the United States. So the real issue is capital flows, not trade. And it’s not all bad for America.

“Politically, Trump’s blast at Germany is just as stupid. Germany is now the most powerful democracy in the world, and our most powerful ally in Europe. Rather than cozy up to dictators, Trump would serve America’s interests better by cozying up to our friends.”

German Chancellor Angela Merkel,
speaks with President Trump during a group photo
at the G7 Summit on May 26, 2017.

(AP/Andrew Medichini)

Does the U.S. have a 'massive' trade deficit with Germany, as Donald Trump said?

By Louis Jacobson