Trump advisor criticises German exports

After Mexico and China, the new US administration now has Germany in its sights: Trump's chief economist Peter Navarro told the Financial Times on Tuesday that Germany was using the undervalued euro to gain trading advantages over the US and its Eurozone partners. The euro is nothing more than an "implicit Deutsche Mark", Navarro said. Does the accusation hold water?

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Süddeutsche Zeitung (DE) /

Export surplus endangers European unity

Although Navarro's accusations are nonsense the German export surplus does present a problem, the Süddeutsche Zeitung explains:

“It reflects massive economic imbalances. Germany's surplus corresponds to the debts of other states. That's what Trump is implying. ... The chancellor tried to defuse the issue with the familiar argument that the monetary policy behind the euro is independent. In the long run, however, that argument is inadequate. Trump's people won't stop attacking Germany. They will be joined by those countries that have long since taken a negative view of the German surplus. This agreement on a particular point is dangerous for Europe's cohesion. Germany can only avert the danger of collapse by systematically reducing its own imbalances.”

Večernji list (HR) /

Germany is a global loan shark

Večernji list can understand why Navarro is critical of Germany's economic policy:

“The US has a 478-billion-dollar capital export deficit which is partly a result of its negative balance of trade in the third quarter of the previous year. … And imports of German goods alone account for half of the US's deficit, which in turn is making Germany the world champion in capital exports. And what is Germany doing with the money its surplus? Most of the 193 billion euros were invested in foreign securities, with just a modest 18 billion being spent on foreign direct investment. In this way Germany is lending the money it earns through its trade surplus to the countries it exports to so they can buy more German goods. This makes Germany the world's top loan shark. … If Germany doesn't slow down its export machinery on its own initiative, Donald Trump will.”