The Pandemic Depression
The Global Economy Will Never Be the Same
Few political personalities are as different as those of U.S. President Donald Trump and German Chancellor Angela Merkel. Trump is a political novice, businessman, and former television personality with little apparent appetite for consensus building. Merkel is a political professional whose nearly 12 years as Germany’s leader have been defined by a knack for quiet compromise.
Those contrasts were on display during Merkel’s visit to the White House on March 17—most visibly, when Trump tried to crack a joke at Merkel’s expense in a question-and-answer session with the media. “At least we have something in common, perhaps,” Trump said, referring to the fact that the U.S. National Security Agency had at one point spied on Merkel’s cell phone and to his administration's own unsubtantiated claim that the government of former U.S. President Barack Obama had asked British intelligence to wiretap Trump Tower. Merkel only winced. That episode, an awkward sequence in which members of the press asked the two leaders for a handshake that did not materialize, and a German reporter’s question to Trump—in which she asked the president why he “so often . . . said things that cannot be proven”—have been the German media’s focus in the days since Merkel’s trip.
Despite those hiccups, Merkel probably viewed the five-hour visit as a substantive success, since it provided her with a firsthand view of a new White House with an apparently divided approach to foreign policy. One group in the Trump administration, represented by such officials as the White House adviser Steve Bannon, opposes EU integration and economic interconnectedness, both of which are chief German interests. Another, represented by figures such as Vice President Mike Pence, Defense Secretary James Mattis, Secretary of State Rex Tillerson, and National Security Adviser H. R. McMaster, appears to favor a more traditional approach to those issues. At the Munich Security Conference in February, Pence and Mattis emphasized that they cherish the United States’ European partners and that Washington is willing to seek common ground on issues such as Russia, the Ukraine crisis, the future of the European Union, NATO, and the transatlantic partnership.
Trump has been oscillating between these two camps' approaches, and his split commitments were apparent on Friday. He opened his press conference with Merkel by reading a carefully worded statement, thanking Germany for its commitment to increase its defense spending, showing appreciation for German support for NATO’s mission in Afghanistan, applauding the chancellor for Berlin’s contributions to the fight against the Islamic State (also known as ISIS), and emphasizing the close, values-based friendship that the United States shares with Germany. Most important, by praising the cooperation between Germany and France over the peace process in Ukraine, Trump indicated that there is common ground between Berlin and Washington over the crisis in that country, one of the most important foreign policy issues for Germany and Europe more generally. Merkel’s message that there are no quick fixes when it comes to the conflict in the Donbas seems to have gotten through.
But during the question-and-answer session, Trump’s tone underwent a reversal. He referred to so-called fake news and doubled down on his claim about having been wiretapped. Trump also insisted that he is “not an isolationist by any stretch of the imagination”—a claim that does not seem to have convinced the many German observers who have noted the president’s transactional approach to trade and security policy. As Jürgen Hardt, a member of Merkel’s conservative Christian Democratic Union party and coordinator for transatlantic relations, told the radio outlet Deutschlandfunk, Trump has suggested that Germany’s trade surplus is a result not of “a very competitive industry and the high quality of German products” but of “Germany obviously having the better [trade] negotiators” in its dealings with the United States. (In fact, Germany does not have any bilateral trade deals with the United States: Berlin’s trade negotiations have been delegated to the European Union.)
As for security policy, Trump is not the first U.S. politician to have insisted on greater burden sharing within NATO. But he is the first to have approached the values-based alliance as though it were a business. The president’s view, reiterated on Friday, suggests not only that NATO members should “pay what they owe” but that they should retroactively compensate the United States for the relatively low defense outlays of the past. Never mind that Merkel emphasized that European officials understand this message, that European alliance members decided to raise defense spending at a NATO summit in Wales in 2014, and that making NATO efficient is not only about spending money but also about making smart investments in the right capabilities. Some German observers were incensed. “This man obviously doesn’t understand the essential meaning of an alliance, which also serves American interests,” wrote Klaus-Dieter Frankenberger, the foreign editor of the Frankfurter Allgemeine Zeitung, a conservative daily. “He defines the relations with the alliance as a kind of international protection racket.”
That NATO and the EU are not free riders but fundamental assets for Washington seems like a message that European policymakers will have to repeat again and again. The same may be the case for the value of an open global economy for the United States. Whereas Trump spoke about bringing back jobs that he has argued the United States has lost through international trade deals, Merkel referred to technological change in the industrial sector—a gentle reminder that automation has done more to eliminate U.S. manufacturing jobs than foreign workers have.
The Trump administration has called into question the long-standing pillars of the transatlantic relationship, from the NATO alliance and European integration to the development of ever-deeper trade relations. It now seems that those fundamentals must be renegotiated. No longer will relations between Germany and the United States resemble an old marriage based on a common history and a deep understanding of shared goals, despite occasional differences.
Much more effort has to be spent on identifying, preserving, and broadening common ground. NATO’s mission in Afghanistan is far from over and will require close coordination between Washington and European governments. A constructive U.S. role in the Ukraine conflict and a common policy toward Russia are still important. Germany will also have to play a leading role when it comes to establishing more balanced burden sharing within NATO and more effective defense coordination within the EU. The Trump administration, which has pledged to undo many of its predecessors’ environmental commitments, will have to be convinced that climate change is a reality and that measures to counter it are more urgent than ever. And last but not least, the United States, Germany, and Europe in general still have real interests in a rule-based order and in strong international organizations. To use one of Merkel’s favorite phrases, there is a lot of work to do.