One of Germany’s top economic officials has hit back against the new US administration’s attempts to widen divisions within the EU by portraying the bloc’s largest economy as a currency manipulator, highlighting the possibility of a clash between Washington and Berlin over Donald Trump’s protectionist rhetoric.
In a speech in Mainz on Tuesday, Bundesbank president Jens Weidmann decried the Trump administration’s accusations that Germany is deliberately weakening the euro to boost trade as “more than absurd”. He also broadcast his concern at signs the White House views Berlin with hostility.
Germany, which holds one of the largest trade surpluses with the US, has come under attack from Mr Trump and the president’s top trade adviser Peter Navarro. Mr Weidmann said the rhetoric was “very worrying, especially as Germany is increasingly in the sights of the US government”.
Germany has the third largest trade surplus with the US, after China and Japan, making it a top target for an administration that has advanced an “America First” agenda, of which trade protectionism is a tenet.
However, while most economists would side with the Bundesbank president’s argument that Mr Navarro’s thesis of currency manipulation “cannot be established by facts”, Germany has come under attack over its large current account surplus.