Frenemies: The U.S.-German Trade Story

How do you counter accusations of snooping on the German Chancellor? With accusations of mercantilism, apparently. That seems to be the tactic out of Washington, where the Treasury Department recently released a report blaming the Germans and their export-focused policies for Europe's debt woes. The timing of the salvo, which could disrupt progress on badly needed trade agreements, was awkward: the Germans were already worked up over reports that U.S. intelligence had been tapping Chancellor Angela Merkel's phone. To be fair, the Treasury critique--that Germany is essentially the China of Europe--is correct. German policies that keep domestic consumption low and exports high mean that the country's growth comes at the expense of everyone else, especially its weaker euro-zone neighbors. But it's a little rich that the report came out a day before President Obama pitched for foreign cash infusions into the U.S.'s export sector at the SelectUSA investment summit. (One selling point is the relatively low wages of U.S. workers--watch out, China!)