Germany, not China, will be Donald Trump’s enemy number one

Germany, not China, will be Donald Trump’s enemy number one

Note from Berlin


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Donald Trump's government is increasingly taking aim at Germany – it is time for Berlin to acknowledge the potential danger.

Last week, first daughter Ivanka Trump and German chancellor Angela Merkel shared a stage in Berlin to discuss ways of empowering female entrepreneurs. The event was part of the German G20 presidency’s outreach programme to civil society, and, despite Ivanka Trump’s somewhat bizarre role, the discussion had a much lighter touch than the painfully awkward meeting between Merkel and Donald Trump in the White House a few weeks earlier.

It should come as no surprise that there is not much love lost between the two starkly different politicians. Merkel, a doctor in physical chemistry, is known as an advocate of “politics of the steady hand”. She once explained, “It takes me a long time to take a decision. But then I stick by them.” She does not have a Twitter account, does not like crass statements, and once took a German flag out of her party’s general secretary’s hand when he began waving it at the evening of her last electoral victory. She is, in many aspects, Trump’s opposite.

But the conclusion that most German newspapers came to after the chancellor’s visit to Washington is right: ‘It could have been much worse.’ Indeed, it is likely to get much worse.

Her country will be in this administration’s crosshairs, and it has nothing to do with Trump Senior personally disliking the much more states(wo)man-like chancellor. In fact, every segment of the much-divided US government has found reason to dislike the most influential European state.

At first glance, Trump and his administration may look like a rather incoherent bunch, with statements being contradicted shortly after they are being made, and a coming-and-going of high-level personnel during the first weeks in office. But there are a few beliefs that the administration has been coherent about – and all of them reflect negatively on Germany.

First, Trump has made it very clear that he sees the world through an economic lens. He was elected on the promise that he would run the US like a company. He regularly attacks globalisation and free trade, and says he will renegotiate NAFTA and put an end to TPP and TTIP negotiations.

There are a few beliefs that the Trump administration has been coherent about – and all of them reflect negatively on Germany.

For Germany, this is highly problematic. After all, we are ‘Exportweltmeister’ – ‘Export world champion’. For years Germany’s economic model has relied on its companies exporting more goods and services abroad than the country imports – Germany has a €20 billion/month trade surplus with the world, €6 billion of which are with the US. The US, on the other hand, has the world’s largest trade deficit – in 2016 this amounted to $500 billion. Trump, during the joint press conference, declared, “I would say that the negotiators for Germany have done a far better job than the negotiators for the United States. But hopefully we can even it out. We don’t want victory, we want fairness. All I want is fairness.”

Apart from ignorance – Germany does not have any trade deals with the US, and, if it did, they would not have been negotiated by German but by EU negotiators – Trump’s statement reveals his view that Germany disproportionately benefits from global free trade, a position it shares with China. He wants to ‘rebalance’ that relationship, most importantly by imposing a ‘border adjustment tax’, penalising any companies that do not produce in the US. These taxes are not yet in force – but the US is already imposing penalties, such as against Salzgitter: since 30 March, the second-largest German steel producer has been obliged to pay a 22.9 percent punitive tariff for alleged dumping.

Second, the ‘alt-right’ ideologues in Trump’s entourage loathe Germany for its refugee policy. The president’s chef ideologue, Steve Bannon, mourns that the West has lost its “Judeo-Christian foundation.” Germany’s welcoming of a million refugees, most of whom are Muslim, amounts to sabotage in this world. Trump, in his famous BILD-Zeitung interview, repeated this claim, arguing that Merkel had made an “utterly catastrophic mistake by letting all these illegals into the country”.

There is further US-German disagreement about international organisations. For Germany, the United Nations, World Trade Organization and European Union are elements of an international system that guarantees equality and justice for all states. The Trump administration – for once in agreement with the Republican party – believes that international organisations try to disempower the US and give weak countries the opportunity to exploit the US.  

Finally, some parts of the Trump administration even dislike the German Mittelstand. Trump likes to surround himself with Silicon Valley entrepreneurs (at least with those who do not actively dislike him): PayPal founder Peter Thiel is in Trump’s camp; Elon Musk, Tesla CEO and the man who wants to send tourists to Mars, is an adviser. Others are joining out of necessity. This crowd’s leitmotif is Schumpeter’s ‘creative disruption’ – the old needs to be destroyed so that the new can flourish. They favour risk-taking and large margins. The German approach, on the other hand, is all about continuity. It is careful, deliberate, and based on the precautionary principle. For the Silicon Valley-type advisers within Trump’s team, this is like propagating communism during the McCarthy era.

It is possible that it will not turn out as bad as we fear. Trump recently praised the “unbelievable chemistry” between him and the German chancellor. And many in Berlin nowadays continue to hope that more liberal forces will prevail in Trump’s cabinet. Still, a tangible risk remains that German-US relations are heading towards a low-point. And it is high time for Germany’s political establishment to acknowledge this danger. Berlin’s current G20 presidency might well provide for less pleasant transatlantic encounters than the entrepreneurs’ empowerment forum did last week.

Read more on: Note from Berlin,European Power,European Strategy,Transatlantic relationship

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