admits that it’s well known Germany sells more than it pur- chases to the U.S. but she feels it “has to do with the quality of our goods,” and stated that German has significant direct U.S. investment. Merkel added “in my opinion, one has to see these things together.” Trump is not the only leader to criticize Germany for the imbalance in their trading relationships. Last year former Prime Minister of Italy Matteo Renzi said Germany was hurting the economy of the entire European Union with their trading practices. Germany not only has a surplus with the U.S. but with most countries that it does business with. The German economy benefits from the production of luxury cars and industrial machinery. Demand has spiked due to the low euro boosting sales of German products. There is merit in the argument made by Merkel that Germany is trying to even out their massive trade deficit. The well-known BMW brand makes SUV’s in North Carolina and exported them globally last year. Other German auto- makers like Daimler AG produce the iconic Mercedes-Benz in Alabama and Volkswagen produces cars in Tennessee. Still, Trump’s case is a strong one. Germany had a record 2016 surplus in trade and the trend continues in 2017. The U.S. consumed 107 billion euros of German exports last year while 58 billion euros of U.S. goods went in the other direction. That resulted in a 49-billion- euro trade deficit for the United States. Germans suggests that number is not a problem and that the U.K. has an even larger gap in trade. No firm sanction or plans have been put into place by the U.S. but Trump continues to remind the German leaders he is not prepared to continue to watch the deficit grow at the expense of jobs in his country. It will be interesting to see where this contentious problem goes as issues between the U.S. and the G7 nations contain to build under his presidency.
By Jamie Barrie M exico and Canada are not the only nations Pres- ident Trump is targeting as examples of unfair trade surpluses with the United States. In recent weeks Germany has been the lightening rod for comments the US President is making suggesting the trade between the two nations is no longer acceptable because the imbal- ance is costing Americans jobs. The rhetoric started in January when Trump noted automak- ers like BMW could face U.S. tariffs of up to 35 percent for cars built in Mexican plants and exported to the U.S. Trump says he wants a fair deal for U.S. workers. The embattled leader has focused his efforts on trading partnerships in which countries are selling significantly more of their good in the U.S. than they are buying products from American companies. China and Germany have been included in many of his remarks.
German Chancellor Angela Merkel spoke to Trump and
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SPOTLIGHT ON BUSINESS MAGAZINE • JUNE 2017
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