All politics are local: understanding Trump’s threats and misunderstanding Merkel’s disappointment

Long-time US Speaker of the House Tip O’Neill used to say “all politics are local”. As a national figure, he was pointing out a truism the world over – and that is that a successful politician always takes a big, intangible or broad issue and puts in terms that constituents can understand and actually care about. That’s what Angela Merkel was doing this past weekend when she spoke of the need for Europe to “take our fate into our own hands”; she was using an international issue for domestic purposes during a campaign rally.

But, of course, the American media, totally absorbed in their US domestic issues, took Merkel’s comments onboard without even considering the German context. And it has meant that Merkel’s comments have created a huge stir in the US.  Below are a few thoughts on how to understand Merkel and what her comments mean for Germany, Europe and Germany’s relationship with the US.

Let me set the scene here. First, there’s the US – consumed by Donald Trump’s surprise victory in the 2016 Presidential elections and the abrupt shift his presidency has meant regarding both domestic and foreign policy. Everything Trump does is scrutinized as a result. And after last week’s acrimony with NATO and European allies, his Presidency is now under siege both domestically and abroad. This morning, Trump tweeted two things – one domestic and one foreign.

First, on the heels of Merkel’s weekend comments that “the times when we could completely rely on others are, to an extent, over”, Trump threatened Germany.

Then, Trump – whose campaign is under investigation for possible collusion with Russia – turned to the US and his view that the Russian investigations are the result of political sour grapes, “fake news” propagated by the US media who supported Clinton and still cannot believe she lost to him.

Trump’s goal is totally domestic. And it is to paint himself with his political base as someone who is still fighting for them and America’s interests at home and abroad despite being victimized by a “corrupt US elite media”, making his agenda harder to achieve. His domestic focus on trade and jobs makes Germany – with its massive trade surplus – a good target. And note that he believes his problems are mostly a ‘communication problem’ which forces him to bypass the media fully and use Twitter to get his message out. Hence his morning tweets on Germany and ‘fake news’.

Then, there’s Germany, where it is election time. So far, Merkel has beaten back the resurgent SPD, her rival and governing coalition partner, to take a firm lead in opinion polls. But Angela Merkel, full in election mode with her political partner and rival, CSU head Horst Seehofer, was giving a campaign speech in Bavaria this Sunday. She was rallying the troops, if you will.

The CSU is more conservative than the CDU and the relationship has been fractious, particularly over the refugee issue. Talk of Germany’s integrating more into Europe or ceding power to Brussels is not a winner in Bavaria, where the CSU dominate.

Therefore, unable to offer specific economic concessions to support her newly elected French counterpart Emmanuel Macron on more EU integration – Merkel did what any good politician would do; she used a US President who is wildly unpopular in Germany – and who had just declined to commit to a shared vision on two important German domestic issues, climate change and NATO – to support Macron’s vision of ‘more Europe’ because she knew this would “sell”. And indeed she was applauded.

Since the Sunday speech, Merkel has repeated the line about the reliability of Germany’s international partners but has softened the tone by adding a line about Germany’s commitment to the transatlantic partnership. That makes her domestic and European aims in using Trump in her speeches as more fully transparent.

The question now is what this all means for the future. On the German side, I don’t think it means anything. This is just like the situation where the English-language press became animated by German finance minister Wolfgang Schaeuble’s words of support for Macron earlier in the month. They said there was a shift in German policy. There wasn’t. The tone was positive but Schaeuble said nothing he hasn’t said before.

I don’t see Germany shifting policy here at all. And the Chancellor’s spokesman Steffen Seibert said as much after Merkel’s comments created a stir:

“Because trans-Atlantic relations are so important to this chancellor, it is right from her viewpoint to speak out honestly about differences,” he said, stressing that the trans-Atlantic ties “are a firm pillar of our foreign and security policy”

On the US side, after Donald Trump’s tweet threat regarding Germany’s trade surplus, one has to wonder if US policy will shift. I am sceptical. To make a threat to Germany’s surplus credible, Trump would have to call out specific trade sectors his administration is prepared to protect. And then he would have to lay out actions he would be willing to take to protect them from the Germans. And then he might have to get approval from Congress to turn those plans into actions. The chain of events is implausible. I don’t see this happening.

The bottom line is that nothing has really changed except tone. And we have been here before – with Reagan and George W. Bush, who were perceived as unpredictable “cowboys” in Germany, a country that values reliability and steadfastness. In Reagan’s case, the image softened over time. But even in Bush’s case, where the image didn’t soften due to the Iraq war, there was no real change in the US-German relationship.

Conclusion: Merkel and Trump are playing to domestic audiences. We shouldn’t exaggerate the impact their words will have on policy. Moreover, we now have two pragmatists in office in France and Germany. Emmanuel Macron showed his own pragmatism yesterday by inviting Vladimir Putin as the first foreign leader to receive as President in France. I expect Germany to show pragmatism by continuing to work with the US on a wide range of issues including security and intelligence. And I certainly don’t expect a trade war. The Germans are playing the long game, knowing that US Presidents come and go and that Europe is still very much dependent on good relations with the US irrespective of who is in the White House.

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.