Unfortunately, Reality Comes to Those Who Wait
Germany’s longstanding trade balance is now coming back to bite us.
Here is a quote from Donald Trump’s little treasure box: “The European Union was formed in order to screw the United States. That’s the purpose of it.” The authoritarian, nationalistic capitalist has been saying that or something like it for years, and when he began to surround his country with a wall of tariffs this year, he said it again.
Of course, the EU was not founded to “screw” the U.S., of all countries. But unfortunately, there is a reason to search for a kernel of truth under the debris of the global trade order that Trump has attacked.
In his blunt, provocative way, the U.S. president is alluding to actual conditions. For years, critical experts have been pointing out the risks of the German economy’s one-sided orientation toward export (and the policies supporting it). The surpluses it produces in the German (and European) trade balance appear elsewhere as deficits. Simply put, China, the U.S. and many others have long paid the salaries and profits of the German auto industry, not infrequently on credit.
The fact that the weak stasis of this system could collapse if China built its own cars and the U.S. at some point stop playing along — there have been warnings about that for many years — and the unheard call for a stronger orientation toward the domestic market is almost as old as the surpluses in Germany’s trade balance. It is really painful to look on as a despot-in-the-making now hands us the bill.
Here is a quote from Donald Trump’s little treasure box: “The European Union was formed in order to screw the United States. That’s the purpose of it.” The authoritarian, nationalistic capitalist has been saying that or something like it for years, and when he began to surround his country with a wall of tariffs this year, he said it again.
Of course, the EU was not founded to “screw” the U.S., of all countries. But unfortunately, there is a reason to search for a kernel of truth under the debris of the global trade order that Trump has attacked.
In his blunt, provocative way, the U.S. president is alluding to actual conditions. For years, critical experts have been pointing out the risks of the German economy’s one-sided orientation toward export (and the policies supporting it). The surpluses it produces in the German (and European) trade balance appear elsewhere as deficits. Simply put, China, the U.S. and many others have long paid the salaries and profits of the German auto industry, not infrequently on credit.
The fact that the weak stasis of this system could collapse if China built its own cars and the U.S. at some point stop playing along — there have been warnings about that for many years — and the unheard call for a stronger orientation toward the domestic market is almost as old as the surpluses in Germany’s trade balance. It is really painful to look on as a despot-in-the-making now hands us the bill.
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