Economic Strength Germany Should Not Fear Trump

Many of Donald Trump's policies may well benefit Germany, even if the president-elect would like to believe otherwise, writes Handelsblatt's politics correspondent
Quelle: dpa
Trump's interview raised eyebrows in Germany.
(Source: dpa)

This time, Donald Trump succeeded in attracting the attention of people in Germany without one of his 140 character messages on Twitter.

In an interview published on two pages of Germany's leading tabloid newspaper Bild, the future U.S. president focused on the German chancellor, NATO, the European Union and Germany’s premium carmaker BMW in particular. Anything less would have been out of character. But Germany can deal with Mr. Trump.

The former New York Governor Mario Cuomo’s once said “Campaigning is poetry, government is prose.”

However this Friday, the Americans will get exactly the president they got to know during the election campaign. But every U.S. administration in the last 15 years has had to deal with above all, China's export surplus, and Germany’s too. And that is why successive German economics ministers never ceased to point out that Germany makes great products and provides great services.

Anyone wanting to export more just has to try that bit harder and, for example, make even better automobiles. And that is why it is crucial for German managers dealing with Mr. Trump to follow the example of all their predecessors: Any false modesty will be steamrollered. Laggards cannot be allowed to set the world economic tempo. You don’t have to be an economist to know that bad products don’t sell. Even Mr. Trump’s “America First” policy will not invalidate the economic laws of nature.

The stock exchange where the economic future of Germany is traded, reacted quite calmly to the Trump interview. Automobile shares lost a little ground, but did not crash. As alarming as Mr. Trump's protectionist rhetoric is, at the end of the day, the future U.S. president sees himself as a businessman negotiating good deals for America.

And it is by no means clear that his economic policy will be bad for Germany. If he reverses Russian sanctions, the European Union will have to follow suit. That is advantageous for the German business sector. German Economics Minister Sigmar Gabriel and other members of the government never lost contact to Moscow. If Mr. Trump rolls out the heavy artillery against China, that means new opportunities for German companies. And China has a high opinion of the quality of German products anyway.

The lifting of Russian sanctions, new business with China, new opportunities for internet firms, banks and traditional industrial companies: These are all sources of hope for Germany.

If Mr. Trump doesn't listen to the internet giants of Silicon Valley in quite the same way as President Barack Obama does, that doesn't have to be detrimental to the German economy. Mr. Trump is quite clearly an “old economy man." Former German Chancellor Gerhard Schröder recently gave his economic policy a seal of approval when he praised his efforts to create more jobs in industry. But there are opportunities here too. Of course, Germany is a long way behind Google & Co. If this gap can at least be shortened, we still won't be in the same league, but it will help competition.

And that is also true for classical industrial policies. If Mr. Trump announces new infrastructure projects, then it is the U.S. cement industry which benefits first and foremost. But if you look at who that belongs to, there is a surprise in store. The DAX-listed building materials manufacturer Heidelberg Cement will certainly be one of the major beneficiaries. As long as Mr. Trump doesn't come up with the idea of prohibiting internationally aligned firms from investing money they earn in the United States elsewhere, that will also mean a boost for jobs in Germany.

Bank shares, especially those of the Deutsche Bank, have recovered significantly since  Mr. Trump's victory. While it is unclear what relationship he has to Germany's biggest financial institution, it seems to have helped Deutsche Bank that the real estate mogul is coming to power. In the final period of Mr. Obama's time in office, the bank has had to pay penalties and damages of more than €7 billion ($7.42 billion). And the European Commission moved against the U.S. tech giant Apple at just the same time.

Now the Deutsche Bank can hope for a new start under Mr. Trump.

The lifting of Russian sanctions, new business with China, new opportunities for internet firms, banks and traditional industrial companies: These are all sources of hope for Germany.

Of course non of this may materialize. But it is all the more important that the German economy exudes self-confidence. Its products and services are world-class. German engineering expertise is unrivaled. Mr. Trump loves Germany not just because of his roots, but also - or precisely because of - the seal of approval “Made in Germany.”

But despite this, if it all does go pear-shaped, then the German economy can rely on its network in the United States, which it has been building and cultivating for decades. That will sustain it, while the chancellery is busy establishing new contacts in the unknown territory which is the Trump camp.

The author is Handelsblatt's head of politics and Berlin bureau chief. To contact: [email protected]