(German Chancellor Angela Merkel with President Donald Trump during a joint news conference at the White House on March 17.REUTERS/Joshua Roberts)
When President Donald Trump attacks Germany, he's messing with the most important trade deal on the planet: the Transatlantic Trade and Investment Partnership.
In 2013, the Obama administration began tightening the US's economic relationship with the European Union. It has been a controversial move, but it makes sense. The EU — as a bloc — is the richest entity in the world, and the US and the EU together make up half of global gross domestic product.
This makes T-TIP the biggest deal in the world, and, the way the Obama administration told it, it has had an impact easing regulations for smaller businesses that normally wouldn't get to trade outside the US.
So you would think that Trump, a supposed consummate dealmaker, would want to walk in to this deal from a position of strength, but that is not what is happening. Thanks to Trump's anti-Germany rhetoric, the US's position in these negotiations is looking weaker and weaker.
This has sent the Trump administration scrambling. Commerce Secretary Wilbur Ross told CNBC he was open to continuing T-TIP talks. His language surrounding it, though, isn't particularly reassuring.
"It's no mistake that, while we withdrew from TPP" — the Trans-Pacific Partnership trade pact among 12 Pacific Rim nations — "we did not withdraw from T-TIP," Ross said.
Yes, Wilbur, that is a fact.
But it may not get us anywhere, especially since Ross' tepid remarks could be too late to cool hotter heads in Europe after his boss' insults.
There's Germany, there's the EU, and then there's the EU and Germany
Trump is coming off a disastrous trip in Europe, in which he again falsely accused Germany of unfair trade practices and attacked the country's automakers.
You may think to yourself, Trump is attacking Germany, not the EU as a whole, so this should be fine. But that's not how this works.
"Germany basically surrendered much of its trade policy when it joined the EU, but Germany is the biggest economy in the EU and often dominant in trade and monetary policy," Lee Branstetter, a trade expert who teaches economics at Carnegie Mellon, said.
Trump insists that Germany should negotiate one-on-one with the US and that its membership in the EU gives its economy an unfair advantage because it depresses the country's currency. In other words, if Germany had its own currency, it would be more valuable than the euro. But it doesn't, so it's not. Trump can cry all he wants about that, and so he is.