Berlin trade policy endangers all

Although his words are blunter, President Trump’s recent attacks on Germany’s trade policies have been made frequently by the global political and economic establishment — and by his predecessor Barack Obama. If anything, Trump should internationalize his critique and rally global support against Berlin’s longstanding determination to rack up trade surpluses.

Americans have valid trade beefs against Germany. It’s the third largest national contributor to America’s trade deficits. And the shortfall is heavily concentrated in advanced manufacturing — historically leaders in productivity and innovation.

Further, the automotive sector in the Trump cross-hairs — but widely hailed as proof of win-win U.S.- German commerce — is no exception. For all the vehicles German firms make domestically and Americans they employ, Transportation Department data from the companies themselves reveal that these autos and SUVs are mainly screwed together from German and other foreignmade parts.

Yet Berlin’s trade policy also endangers all countries. Germany’s international surpluses are now the world’s biggest. Major economists, and institutions such as the International Monetary Fund, assign such lopsided economic flows much blame for inflating credit bubbles.

Berlin and its defenders note that Germany makes many outstanding products and can’t unilaterally set the value of a euro currency that keeps their prices irresistibly low. But eminently controllable are the wide-ranging non-tariff barriers and miserly government spending policies that impede Germany’s imports, and that no true global free trade mainstay would maintain.

Trump’s critics warn that decrying Berlin’s skimpy NATO defense contributions and Germany First trade policies will threaten a core U.S. alliance relationship and the global economy. But neither system can long survive German free-riding, and a broader U.S. economic indictment will resonate powerfully around the world.