On Tuesday morning, President Trump wrote a tweet saying that the United States had a “MASSIVE trade deficit with Germany.” He further said that this was bad for the United States and (in what seemed to be a vague threat against Germany) said that this would change. This follows on Trump’s reported statement in a closed-door session with European officials a week ago that German trade policy was “bad, very bad.” What lies behind Trump’s complaints about Germany’s trade deficit? Here’s what you need to know.
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
— Donald J. Trump (@realDonaldTrump) May 30, 2017
Trump doesn’t understand Germany’s trade relationships
The Trump administration seems to have some basic misunderstandings of Germany’s economic policy. Trump’s trade adviser, Peter Navarro, seems to think that Germany wants a weak euro. In fact, German officials have spoken out consistently against the European Central Bank’s quantitative easing policy that is helping hold down the euro’s value.