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Trump Is Coming for Europe’s Most Important Alliance

Gregory Viscusi
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Trump Is Coming for Europe’s Most Important Alliance

(Bloomberg) -- In the end, they papered over the cracks.

After months of increasingly acrimonious sniping, Emmanuel Macron and Angela Merkel set aside some of their differences last month, pushing through a deal on the next head of the European Commission. The rapprochement arrived just in time, with Donald Trump coming to Europe this week for the Group of Seven summit in Biarritz, France.

The U.S. president has a knack for finding the pressure points in the Franco-German relationship and has been looking to drive a wedge between the two leaders as he turns his focus toward the U.S.’s terms of trade with Europe. 

“Trade is a risk in their relationship,” said Enrico Letta, the former Italian prime minister who has worked with both Merkel and Macron. “France as a country has protectionist tendencies. Germany relies far more on industrial exports, and is keen to defend them. It’s another asymmetrical situation.” 

European Union diplomats fear that once Trump has rammed through a trade deal with China, he will turn his attention to Europe. While trade isn’t on the G-7 agenda, it’ll come up in one-on-one meetings if the president’s recent rhetoric is any guide.

 

At a fundraiser in the Hamptons this month, Trump raised the prospect of imposing 100% tariffs on French wine, according to two people familiar with the conversation. 

The U.S. Trade Representative is also completing a probe into a French tax on internet giants like Google and Facebook that could pave the way for retaliatory tariffs, while the EU is braced for the World Trade Organization to give a green light for U.S. tariffs on up to $7 billion of EU goods after a ruling on illegal aircraft subsidies.

“The European Union is worse than China, just smaller,” Trump said at a rally in Manchester, New Hampshire, last week. “It treats us horribly: barriers, tariffs, taxes—and we let them come in.”

The prospect of a fully blown trade war is already sowing distrust between Berlin and Paris. 

The problem is that Trump’s demands are causing most resistance in France, and he’s mainly threatening punishment for Germany. 

The U.S. wants more access to Europe’s agricultural markets—a red line for the French—and the president is mulling tariffs on cars, the backbone of the German economy, unless he gets it. 

So Merkel’s aides are watching the French president nervously.

German officials already feel that Macron has been playing a double game on trade. 

France, along with its allies, persuaded Germany to keep agriculture out of the EU’s trade talks with the U.S. in April but still cast a symbolic vote against opening trade talks. 

 

Such a blatant sop to rural voters at home on an issue so vital to Germany greatly annoyed Merkel. She’s not convinced she can rely on Macron on trade, according to a person familiar with her thinking.

The policy differences mirror the contrasting backgrounds of the two leaders. 

One is the 65-year-old daughter of a pastor who grew up in communist East Germany, the other a child prodigy who was writing plays at age 15. She’s cautious, he moves fast. He likes grand declarations, she works behind the scenes. 

At the October 2017 Frankfurt book fair, Macron gave a sweeping talk about the French 20th century philosopher Paul Ricoeur. When he was done, Merkel said “I didn’t understand what you said, but it sounded so beautiful.” She then launched into a discussion of the intricacies of German copyright rules.

And yet when Macron came to power it looked at first like they might strike up a truly effective partnership—the previous three occupants of the Elysee Palace had failed to deliver the sort of reforms Germany has been hoping for. 

When Macron tried to answer politely, Trump cut him off and called her a “loser,” according to a diplomat present

Macron promised a long-overdue modernization of the French economy and, in exchange, he bet that Merkel would persuade German skeptics to accept greater financial integration of the euro zone. Both sides quickly wound up disappointed. 

Macron’s advisers say he hoped Merkel would show greater courage after more than a decade in power. But they also recognize both sides were unlucky with the timing. 

Germany’s inconclusive September 2017 elections touched off months of political gridlock and eventually left the chancellor’s hands tied by hardliners in her party leery of Macron’s proposals. 

Into this increasingly frustrating relationship, stepped Trump. 

At a White House meeting during Macron’s state visit in April 2018, Trump began with a tirade about German trading practices and then asked Macron what he thought of Merkel. When Macron tried to answer politely, Trump cut him off and called her a “loser,” according to a diplomat present.

Trump’s monologues, sometimes premised on basic factual errors, can leave Macron lost for words, the diplomat said. But the president’s reading of the big picture can make a lot of sense all the same, he added.

Macron’s relationship with Trump has deteriorated since then, and he’s stood firm with Merkel on both Iran and climate. But the French leader has also shown that he’s prepared to exploit the same pressure points as Trump and on occasion to leave Merkel isolated when she stands up to the U.S. 

A month after that White House encounter, Macron delivered his harshest rebuke yet to Merkel. 

Invited to Aachen, Germany, to receive an award for serving European integration, Macron lectured an audience including the chancellor for obstructing his plans, even echoing Trump’s critique of the Berlin government. 

 

“Germany can’t have a perpetual fetish about budget and trade surpluses, because they come at the expense of others,” he said. 

When Germany blocked arms exports to Saudi Arabia last year after the murder of journalist Jamal Khashoggi, Macron, like Trump, sought to shield his relationship with the Saudi regime and dismissed Merkel’s stance as “demagoguery.” That fight put a question mark over French-German plans to jointly develop tanks and a fighter plane.

Macron even threw a spanner in the works of German plans for a new gas pipeline to Russia, a project that enrages Trump. 

Officials in Berlin were furious when France persuaded the EU to demand greater regulatory oversight of the North Stream 2, labelling it a threat to German interests. 

A compromise was found, but the bad taste remained. 

The Germans’ anger flared up again in May when Macron shot down their candidate to head the European Commission. Manfred Weber was the head of the biggest group in the EU parliament, a party ally of the chancellor, and officially the winner of the EU elections. But Macron demolished his credentials at a dinner in front of EU leaders. 

Merkel herself had been lukewarm about Weber, and acknowledged his inexperience. But the German camp saw Macron’s move not just as a European power play, but an attack on the European party system that has been a key element in their influence.  

What followed was like a replay of the all night crisis summits of 2015 with an added element of farce. The 28 EU leaders were called back to Brussels for endless negotiations, though this time it wasn’t the fate of the euro that was at stake, just the identity of the bloc’s top bureaucrat. 

Macron settled the crisis with a call to the chancellor, proposing German Defense Minister Ursula von der Leyen as a compromise candidate who could win broad support. 

Macron describes their jousting as “productive confrontation.” Merkel accepts that they have “differences in mentality.” People who know them say they aren’t close, but manage to work together.

Their alliance has been fundamental to reining in the U.S. leader at previous G-7 meetings. They were at the center of the push that persuaded Trump to sign the communique at last year’s summit in Canada, even if he then ripped it up on the plane home. And any tensions this weekend could compromise efforts to wring concessions from the U.S. 

As Air Force One begins its descent into Biarritz on Saturday, both will know the relationship is in for another stress test.

 

--With assistance from Jennifer Jacobs, Arne Delfs, Shawn Donnan and David Wainer.

To contact the author of this story: Gregory Viscusi in Paris at gviscusi@bloomberg.net

To contact the editor responsible for this story: Ben Sills at bsills@bloomberg.net

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