Is Trump Right About Germany’s Surplus? | by Dalia Marin - Project Syndicate

Is Trump Right About Germany’s Surplus? | by Dalia Marin - Project Syndicate

After years of condemning Germany's large current-account surplus, Donald Trump is hoping that the specter of high US tariffs will impel the country to change its ways. But Trump's approach reflects a fundamental misunderstanding of trade imbalances and ignores that Germany's surplus is already on track to shrink.

In 1968, Germany recorded its first export surplus with the United States (+1.0 billion euros). And now, for more than three decades, Germany has been exporting more goods to the United States than it has imported.

Germany, the EU's largest economy, has been exporting more goods to the US than it imports for 33 years. The last import surplus was in 1991, the Federal Statistical Office announced on Thursday. From 1950 to 1967, Germany had a trade deficit with the United States every year. This deficit fluctuated between €1.9 billion and €0.2 billion. During this period, the US consistently ranked first among the most important suppliers of German imports. …

The additional tariffs threatened by the United States on goods from the European Union (EU) stem, among other things, from the US government's critical stance toward Europe's export surplus. In fact, Germany, the EU's largest economy, has been exporting more goods to the US than it imports for 33 years. The last import surplus occurred in 1991.