Trump's Right: Germany's Trade Surplus Is Too Big
There's probably not much either one of them can do about it.
Photographer: Justin Sullivan/Getty ImagesGermany's gigantic trade surpluses are a problem. Almost everybody -- including lots of Germans -- agrees on that. But when President Donald Trump decries the U.S. trade deficit with Germany, as he did this morning on Twitter, and declares that "This will change," it does raise an important question: How can it be changed?
As is apparent from the above chart, Germany's current account surplus (trade plus income flows) has kept growing even as the two nations perhaps most famous for their surpluses -- China and Japan -- have seen theirs shrink. In 2016, Germany's current account surplus blew past China's in absolute terms ($297 billion to $196 billion), even though China's economy is three times bigger.
Germany's bilateral trade surplus with the U.S. has grown a lot too over the course of the current economic recovery, although it has shrunk a bit since 2015.