Today’s article aims to offer insights into possible consequences on the Germany-USA bilateral relations, trade and even economical aspects.

Germany finds itself at a critical crossroads, caught between domestic political instability and the implications of a second term for Donald Trump as U.S. president. The results of the U.S. election have sparked unease in Berlin, raising questions about Germany’s preparedness for a more turbulent transatlantic relationship and its own political future.

A Rocky Transatlantic Road Ahead

Donald Trump’s presidency has always posed challenges for Germany. His 2016 campaign frequently criticized the country, targeting its trade surplus, migration policies, and defence spending. A second Trump administration is expected to amplify these pressures, particularly as Germany navigates its reliance on U.S. security guarantees and its dependence on open markets.

During his first term, Trump cast doubt on NATO, threatened to withdraw U.S. troops from Germany, and lambasted the country for underfunding its defence. Trump’s proposed tariffs—20% on imports from most countries—would significantly harm Germany’s export-driven economy, particularly its automotive and pharmaceutical industries. The German Institute for Economic Research estimates these measures could cost Germany over €120 billion across four years.

The trade impact extends beyond direct tariffs. Analysts warn of a potential global trade war if Trump escalates tensions with China and other nations. For Germany, which thrives on international trade, this prospect threatens its economic stability during an already precarious period.

A Strained Alliance with Washington

Chancellor Olaf Scholz has fostered a close partnership with President Joe Biden, aligning on critical issues such as support for Ukraine and meeting NATO’s defence spending targets. Germany also played a key role in securing the release of political prisoners like Wall Street Journal reporter Evan Gershkovich from Russia. Scholz’s public admiration for Biden, however, may backfire under Trump, who could upend transatlantic security cooperation and seek to negotiate directly with Russia, potentially at Ukraine’s expense.

Trump’s unpredictable stance on Ukraine adds another layer of uncertainty. While he has promised to end the war quickly, experts suggest this could involve forcing Ukraine to cede territory to Russia. Such a move could weaken European unity, with Germany potentially using U.S. policy as a pretext to scale back its own commitments.

Domestic Turmoil and Calls for New Elections

Germany’s political landscape is equally unsettled. The coalition government, led by Scholz’s Social Democrats and joined by the Greens and the Free Democrats (FDP), has struggled to maintain cohesion. The war in Ukraine and a constitutional court ruling on budget amendments have exposed deep rifts within the coalition, leading some to call for new elections.

The FDP, with its commitment to fiscal discipline and Germany’s constitutional debt brake, holds significant influence over the coalition’s survival. While its stance may resonate with voters in a future election, critics argue that Germany needs bold economic reforms and stimulus measures to address its challenges, not austerity.

Climate Action and the Transatlantic Divide

Germany’s ambitious climate agenda faces headwinds under a Trump presidency. Trump’s disdain for renewable energy and environmental regulations contrasts sharply with the Biden administration’s alignment with Germany on climate action. Trump has frequently used Germany as a cautionary tale, criticizing its reliance on renewables and migration policies as examples of poor governance.

For Berlin, the return of Trump could hinder efforts to secure international agreements on reducing carbon emissions, complicating Germany’s path to achieving carbon neutrality.

Navigating an Uncertain Future

As Germany grapples with the implications of a Trump presidency and its own domestic challenges, the stakes for Europe’s largest economy are high. The combination of economic vulnerability, political instability, and a potential rift with Washington underscores the urgency for Germany to recalibrate its strategies.

Whether it can rise to the occasion remains to be seen, but one thing is clear: Berlin faces a daunting test in navigating a world reshaped by shifting alliances and political uncertainty.

References

David-Wilp, S. (2024, November 06). Germany: Between A Rock And A Hard Place. Retrieved from GMF: https://www.gmfus.org/news/germany-between-rock-and-hard-place

Hasselbach, C. (2024, November 06). Trump’s election victory is a nightmare for Germany. Retrieved from DW: https://www.dw.com/en/trumps-election-victory-is-a-nightmare-for-germany/a-70715626

Photo:
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