German-US surplus still huge

Germany’s trade surplus with the US, a frequent source of tension with US President Donald Trump, declined in 2018 but nonetheless remained at about €49bn.

Germany’s trade surplus with the US, a frequent source of tension with US President Donald Trump, declined in 2018 but nonetheless remained at about €49bn, data seen by Reuters showed on Monday.

Trump has frequently criticised the large trade surplus that Europe’s biggest economy has with the US and has threatened to put tariffs on German cars.

But German Chancellor Angela Merkel has questioned Trump’s analysis, saying that trade surpluses are calculated in an old-fashioned way and that the US runs a large account surplus with Europe if services are included in the total.

In June 2018, Merkel suggested that existing international trade accounting systems should be updated.

TRADE SURPLUSES ARE CALCULATED IN AN OLD-FASHIONED WAY AND THE US RUNS A LARGE SURPLUS IF SERVICES ARE INCLUDED

Preliminary calculations from the Federal Statistics Office showed that German exports to the US rose 1.5% to a record high of €113.5bn in 2018. That meant the US remained the biggest buyer of “Made in Germany” goods — ahead of France, which purchased €105bn’s worth, and China, with €93bn’s worth.

German imports from the US increased by about 4% to €64.6bn. That meant the surplus with the US was about €1bn less than in 2017. But it was still the largest surplus Germany has with any country and accounts for more than a fifth of Germany’s overall export surplus of about €228bn in 2018.

China remained Germany’s most important trade partner in 2018. The countries exchanged goods worth almost €200bn. German exports to China rose about 8% to €93bn in 2018 while imports from China rose about 4% to €106bn.