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  March 20th, 2017 | Written by

Trump’s Misstatements on Trade at Merkel Press Conference

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  • The president appears to believe that the US has trade agreements with Germany.
  • Trump: “Germany has done very well in its trade deals with the United States.”
  • Trade between the US and Germany are governed by the rules of the World Trade Organization.

While the political press has been lamenting President Donald Trump’s doubling down on his allegations of being surveilled by his predecessor, in the presence of the visiting German Chancellor Angela Merkel, we here at Global Trade focus, not surprisingly, on international trade, so we’re going to bring you Trump’s gaffes with respect to trade policy joint press conference with Merkel.

We’re not talking about his bashing of NAFTA–that’s old hat. And at least it’s a recognizable policy that people can disagree about and debate over.

No, the president appeared from his statements to believe that the United States has trade agreements with Germany and that those agreements are unfair.

“Right now, I would say that the negotiators for Germany have done a far better job than the negotiators for the United States,” the president said.  “But hopefully we can even it out.  We don’t want victory, we want fairness.  All I want is fairness. Germany has done very well in its trade deals with the United States…”

The US doesn’t have any trade deals with Germany, if we’re talking about free trade agreements of the kind the US has with Canada, Mexico, South Korea, the Dominican Republic, and others. Trade between the US and Germany are governed by the rules of the World Trade Organization, a multilateral institution, the same as with any country with which the US does n ot have a specific agreement.

Maybe Trump wasn’t talking about free trade agreements. Maybe has was referring to the fact that Germany is an exporting powerhouse while the US is a net importer. What’s he going to do about that? Instruct companies how to negotiate better? Perhaps tell US companies what they can or cannot import? Maybe he’ll put restrictions on imports from Germany and/or other countries. That’s only going to lead to retaliation that will bring about less trade, and that will impoverish everyone.

Trump has articulated his preference for negotiating bilateral trade deals. But is he thinks he’s going to be sitting down with Germany to hammer about a free trade agreement, he’s barking up the wrong tree.

In response to a reporter’s question, Merkel would have none of Trump’s version of bilateralism. “I personally don’t think that Germany needs to negotiate and not the European Union,” she said.  “The European Union…negotiates on behalf of the member states…Indeed, this would be then qualify as a bilateral agreement between the EU and the United States if we had it.”

In other words, the only deal Merkel would entertain is one that is concluded between the EU and the US. It’s debatable whether that would qualify as a bilateral agreement, as she said, but it’s clear there will be no US-Germany free trade agreement.

By the way, under Obama, the US and the EU were negotiating the Transatlantic Trade and Investment Partnership (TTIP). Surprisingly, given Trump’s loathing of the Trans-Pacific Partnership, which he abandoned during his first days as resident, the administration has yet to articulate a position on the accord with the EU.