“Unfair” US President Trump finds his country’s foreign trade deficit-and blames other countries, among other things, the world export world champion Germany. Rightly right?
The current record of the United States is deep red. According to data from US statistics authorities, the United States 2024 was introduced to the equivalent of just under 1,000 billion euros (one billion euros) and services.
Data on individual economic partners are not yet available for the year as a whole. However, there are figures for the first three quarters of 2024. In these nine months, the US current account compared to the European Union is negative at just under 130 billion euros, of which 75 billion euros are on Germany alone.
Customs against Europe
This data is unpleasant for the US economy. They are fueling plans by the new president to protect his country from supposedly unfair foreign business.
High tariffs are supposed to make foreign goods and services in the United States expensive. The aim is to facilitate business for US providers in America. American companies are said to benefit US companies that create jobs for Americans.
Principles of foreign trade
If you shop abroad, you have to pay money and get a corresponding value. The same way. No one would buy anything if he or she did not promise an advantage. Nobody sells anything to get worse afterwards than before.
The following applies to private individuals and companies: You cannot always shop, you have to earn the money. For countries, this means that if you import plenty of, you also have to get plenty of money in. If the USA buy porsches and painting roads in Germany, you have to ensure money in other words – for example by being interesting for investments from all over the world.
Germany and the USA
In order to give the transatlantic customs discussions a reasonable basis, the Bundesbank published a figure at the end of January with the harmless title “Lander portrait: United States”, which is continuously supplemented.
The German current account compared to the USA is deep black. In 2023, Germany received 105 billion euros more from the United States in 2023 than it sent there. This is essential to German industry, which produces a lot of coveted quality and sells to America. There are also rich profits from German investments in America.
US tech giants
While the contribution of industry is crucial for Germany, their technologists are a trump card for America. If you look at the US-German relationship alone, the numbers seem harmless: the German current account even has a small plus of seven billion euros in favor of Germany.
Where are Microsoft, Amazon and Meta’s profits? The European statistics authority “Eurostat” brings clarity. In 2023, the EU had a deficit for (computer) services of almost 110 billion euros. It is booked in Ireland where the Big Tech Groups operate their European headquarters.
US Investment banks
The highly developed US banking industry also causes an inflow to America and drainage from Germany and Europe. The Association of Foreign Banks Names for the German investment banking market from 2022: The four largest US investment banks alone received 536 billion euros in Germany.
Now the fees taken are not the same as profits. However, American investment banks did bombing just last year. The annual financial statements are not yet available, but individual numbers of the four quarters. They can be brought together with previous information about the regional distribution of the business.
Ten billion euros profit
For the Bank of America, Goldman Sachs, JP Morgan and Morgan Stanley, the profit from investment banking last year can be calculated from the “Europe, Africa and the Middle East” region with ten billion euros. Africa is to be neglected. The rich Arab oil states play a role in investment banking; Business in Europe is far more important.
So US banks do not come to German mechanical engineering or US computer giants. However, they shovel plenty of money over the Atlantic, which was not generated more or less fairly than other money.
Unclear data situation
If you enter the number mountains of statistical offices and central banks deeper: the data does not differ ideologically, but methodologically. If European methods are used, the current account with the United States is much slate than when working with US data.
How does that come? In America and Europe, highly professional experts work with great care. They constantly exchange ideas at international conferences and through specialist journals. Nevertheless, their results are often different.
A lot can be explained with different assignments. Since it is always a lot of thousand billions, it is not surprising that with small differences in the method, a European current account plus from SoundSoviel can come out billions of euros and one thing that can be twice as large. “If it were easy to read somewhere, we are not needed,” commented an experienced statistician.
