FRANKFURT — China bears the brunt of U.S. anger over unfair trade, but Germany’s foreign surpluses are now far larger and may be more consequential for America’s economy and the rest of the world.
Low-wage Chinese workers have put downward pressure on U.S. manufacturing wages for years, but Germany’s industries compete more directly with U.S. industries.
Nine of Germany’s 10 top export categories, such as machinery and electronic equipment, are the same as the U.S. top-ten exports, says Caroline Freund at the Peterson Institute for International Economics.
The weak euro — which has lost around a quarter of its value against the dollar over the last three years — gives German companies an extra edge in international markets. Germany’s surpluses have drawn fire from the new U.S. administration, and could figure large when Group of 20 finance ministers gather in Baden-Baden on March 17.