German Foreign Minister Heiko Maas called on the European Union to unite and fill the void left by the U.S. drawback from global agreements that have underpinned trans-Atlantic relations for decades.
Maas’s warning that the post-World War II order “no longer exists” signals that Germany is starting to confront a president who seems to delight in challenging allies on issues from security to exports. Chancellor Angela Merkel earlier challenged Trump over U.S. services exports to the EU.
“The Atlantic has gotten wider under President Trump,” Maas said in a speech in Berlin on Wednesday. “Trump’s isolationist policy has opened a huge worldwide vacuum. Therefore our common response today to ‘America First’ must be ‘Europe United.”’
Merkel rebuffed Trump’s sustained criticism of Germany’s export prowess in a speech on Tuesday, arguing that the U.S. runs a trade surplus with Europe when services are included.
The U.S. has a $14 billion dollar current-account surplus with the EU, Economy Ministry spokeswoman Tanya Alemany told reporters in Berlin when asked about Merkel’s remarks. In contrast, the U.S. Census Bureau says the EU had a $101 billion trade surplus in goods and services with the U.S. last year and a $30.3 billion surplus in the first quarter of 2018.
‘Old-Fashioned’ Calculus
“Trade surpluses are still calculated in a pretty old-fashioned way, based only on goods,” Merkel told a business conference of her Christian Democratic Union party in Berlin. “But if you include services in the trade balance, the U.S. has big surplus with Europe.”
While measures of international trade in services vary, Merkel may have in mind U.S. companies such as Facebook Inc. and Apple Inc., said Carsten Brzeski, chief economist at ING-Diba in Frankfurt.
“Merkel obviously has a point that not all services are included in the traditionally measured trade balance,” he said in an interview. “It’s as much cherry picking as singling out steel, aluminum and autos.”
To counter U.S. retrenchment, Maas said the EU must redefine its relationship with the U.S. and take on greater global responsibility, including on foreign policy and defense.
German Economy Minister Peter Altmaier, a close ally of Merkel, vowed to defend the country’s steel industry against the effects of U.S. tariffs.
“I will make sure that the German and the EU steel industry will not become victims of U.S. policy,” Altmaier said at a steel lobby event in Berlin on Wednesday evening. The EU would present a united response in the next few days, he said.
Filling the Vacuum
“Who will fill this vacuum? Authoritarian powers? No one?” Maas said. “Germany has to be part of the answer.”
Another way to strengthen Europe is to close prosperity gaps between euro-area countries by going further than recent proposals by Merkel, he said.
“Saving is a virtue, but tight-fistedness is a threat to what we want to preserve and build out: Europe’s unity and strength,” said Maas, whose Social Democratic Party is Merkel’s junior coalition partner. — Bloomberg