German Chancellor Angela Merkel claimed on June 14 that the United States ran a $14 billion surplus rather than $153 billion deficit in 2017 and said that the administration of President Donald J. Trump does not take into account trade in services when making claims that being taken advantage of by its trade partners in Europe.
The source of Merkel’s claims remains unclear, but the US did have an account surplus with the EU in 2017. Merkel’s comment echoes those of German economists who say that Trump regularly cites “primary income” figures from goods, in which the US has a €122 billion deficit, but ignores the fact that the US has a €167 billion surplus in services and primary income from interest and royalties.
Addressing her party’s annual Economic Council Conference in Berlin, Merkel endorsed the argument that the traditional indicator of the trade balance reflects trade in goods but not in services and, therefore, is outdated.
Part of the dispute with Trump at a contentious G7 summit in Canada on June 8-9 is Trump’s insistence that the United States cannot continue to run trade deficits with its major trading partners in Canada and the European Union.
At the summit, Trump threatened Merkel with sanctions on German car manufacturers, for whom the US market is of paramount significance.