Daily Archives: March 18, 2017

Trump vs. Merkel

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The meeting between the so-called president and German Chancellor Angela Merkel seemed a bit prickly to me, although of course I wasn’t there. Germans were upset that the so-called president failed to shake her hand at one point. But that seems the least of it.

Trump apparently believes that Germany is screwing the U.S. in trade deals.

Trump told Merkel and the press that Germany had gotten the better end of the stick in trade deals with the US in the past and that he was looking to rectify that situation.

“The negotiators for Germany have done a far better job than the negotiators for the United States,” he said. “But hopefully we can even it out.”

We know what “even it out” means, and it is an absurd notion. It means negotiating a bilateral trade deal with Germany and somehow ignoring the rest of the rest of the European Union.

Merkel explained to Trump that  “The European Union is negotiating those agreements for all of the member states,” but whether he grasped that is hard to tell

Of course, what Merkel says about it doesn’t matter in a White House that is gripped by the delusion that Germany can just tell the EU to take a hike — at least, it will be gripped by this for as long as that policy is directed by Trump’s trade head, Peter Navarro.

Navarro, in a much-derided speech this month, said Germany “uses the argument” of being in the eurozone to avoid trade deals with the US, and that because of this Germany would be “one of the most difficult trade deficits we’re going to have to deal with.”

Navarro has gone as far as to accuse Germany of being a currency manipulator for using the euro. He thinks that because countries with weaker economies than Germany’s are factored into the euro’s value, Germany can sell its manufactured goods more cheaply than it could if it had its own currency.

Obviously, that’s not currency manipulation. That’s just the reality of the euro’s makeup.

But it means Merkel faces a scenario in which the president of the United States and his top trade adviser think one of their closest and most important allies is lying to them about its need to respect the EU. Trump and Navarro think this is a choice Germany is making about the US, not an obligation that is part of the fabric of its political and economic systems.

Peter Navarro is director of the National Trade Council, a newly formed bureaucratic thingie in the executive branch somewhere. This is from an article about him:

It is sometimes difficult to get a detailed, direct answer from President Trump and his surrogates on their economic policy.

During the campaign he slid past substance by making sweeping claims of how, under a Trump administration, the US would ‘”win bigly” and “stop being taken advantage of.”

Those pronouncements continue.

But luckily there is one voice coming from the White House that clearly articulates the direction in which it wants this country to head economically. That voice belongs to Peter Navarro, the head of Trump’s newly formed National Trade Council.

Over the past few weeks, Navarro has given a number of interviews that explain the administration’s propensity for victimhood, an obsession with Germany, and a deep-seated desire to change the face of the American economy as we know it.

All these factors have contributed to growing fears that this administration will start a trade war with any of the countries it has scapegoated — Mexico, China, or, yes, now Germany.

I missed this, but in January Trump suggested a 35 percent tariff on BMWs imported into the U.S., and Germans probably are still pissed about that —

Germany’s deputy chancellor and minister for the economy, Sigmar Gabriel, said on Monday morning that a tax on German imports would lead to a “bad awakening” among US carmakers since they were reliant on transatlantic supply chains.

“I believe BMW’s biggest factory is already in the US, in Spartanburg [South Carolina],” Gabriel, leader of the centre-left Social Democratic party, told the Bild newspaper in a video interview.

“The US car industry would have a bad awakening if all the supply parts that aren’t being built in the US were to suddenly come with a 35% tariff. I believe it would make the US car industry weaker, worse and above all more expensive. I would wait and see what the Congress has to say about that, which is mostly full of people who want the opposite of Trump.”

In an interview with Bild and the Times, the US president-elect had indicated that he would aim to realign the “out of balance” car trade between Germany and the US. “If you go down Fifth Avenue everyone has a Mercedes Benz in front of his house, isn’t that the case?” he said. “How many Chevrolets do you see in Germany? Not very many, maybe none at all … it’s a one-way street.”

Asked what Trump could do to make sure German customers bought more American cars, Gabriel said: “Build better cars.”

Trump was never a manufacturing guy, so he doesn’t understand supply chains. And he doesn’t understand how the EU works, and neither does his trade guy, Navarro. What else doesn’t he know?

After tweeting from Mar-a-Lago that he had a GREAT meeting with Angela Merkel, in spite of what the FAKE NEWS said, he stepped in more doo doo.

Um, what is he talking about? I didn’t think the U.S. collected money to run NATO. 

And, of course, it doesn’t. Nobody owes NATO money. Nobody owes the U.S. anything on behalf of NATO. The issue is that NATO members commit to spend 2 percent of their gross domestic product on defense, and most of them don’t. Germany spends 1.2 percent, although Merkel has said that will increase. But framing this issue as if Germany is somehow victimizing the United States is just  … weird.

See also Oops, he did it again: Donald Trump just can’t stop himself from blurting out state secrets.