German Chancellor Angela Merkel Blasts Trump on Trade; Claims Germany Invests 10x as Much in America as Vice Versa
On June 29, 2017, German Chancellor Angela Merkel blasted US President Donald Trump’s administration over its trade policy and rhetoric.
Merkel said Trump’s focus on America’s (enormous) trade deficit with Germany is misleading, and doesn’t accurately reflect the trade relationship between the two countries.
She went on to say that Germany invests ten times as much in the US than vice versa—in effect saying that the US benefited far more than Germany from their trade paradigm.
Merkel also pointed out that German-owned factories in the US are a major source of lucrative American exports. For example, she noted that BMW’s South Carolina factory is America’s most prolific automobile factory in terms of exports.
That’s great, but it’s not true–not even remotely true. Merkel is either lying, or grossly misinformed.
Here’s the real figures according to the latest publicly available data:
- German foreign direct investment in the US totaled $16 billion in 2014.
- US foreign direct investment in Germany totaled $9 billion in 2014.
That’s nowhere close to the “ten times” Angela Merkel mentioned—it’s not even double.
And if we’re being honest, the foreign direct investment flows pale in comparison to the size of the trade deficit.
America’s trade deficit with Germany was $64 billion in 2016—quadruple German direct investment in the US.
When this indirect investment is accounted for, the US actually invests significantly more in Germany than vice versa.
Merkel knows this, she’s just spinning the numbers for political purposes, much like how she handled the refugee crisis. Merkel is a master of fudging the numbers.
Now for those of you who don’t think the trade deficit is a problem, I urge you to read the linked article.
Trump’s right, America needs to start taking its deficit seriously. Germany is as good a place to start as any.