Chilly forecast for Merkel's visit

Chilly forecast for Merkel's visit with Trump

No hugs and kisses are expected between the German leader and the U.S. president, who have a cool relationship — but must still work together.

By MATTHEW KARNITSCHNIG

Auf Wiedersehen, Macron. Now it’s the bad cop’s turn.

After days of pomp, kisses, lavish dinners and a picture-perfect tree planting, U.S. President Donald Trump is about to be confronted with Europe’s sterner side, courtesy of Angela Merkel.

When the president sits down opposite the German chancellor in the White House on Friday, the niceties will be kept to a minimum. Unlike French President Emmanuel Macron, Merkel will not be rubbing elbows (either literally or figuratively) with Trump. There will be no white hats. Berlin has stressed that the three-hour meeting will be a “working session.”

Their previous encounters would suggest Trump and Merkel are more than happy to keep it that way. The pair went five months without even speaking to one another on the phone, a dry spell that only ended in March.

Whether the issue is climate, trade, NATO, or the Iran nuclear deal there’s not much the pair can agree on. Nonetheless, Merkel has no choice but to try and make the relationship work.

The main aim of her Washington mission might best be described as damage control. In contrast to Macron, who took advantage of his camaraderie with the U.S. president to strike a more critical chord about Trump's leadership, Merkel will stick to brass tacks.

Whereas President Barack Obama cultivated an extremely close partnership with Merkel, under Trump, Germany is “now considered by the Americans to be an unreliable partner,” said Jan Techau, Berlin-based director of the Europe program at the German Marshall Fund of the U.S. “We have a divide on the policy side and a lack of chemistry between the two leaders.”

The difficulty for Merkel is that Germany needs the U.S. as much as ever, especially when it comes to trade. German industry exports more to the U.S. than to any other country, some $135 billion worth of goods in 2017 alone. The cars and machinery Germany sells to the U.S. are the core of its economy and, by extension, Europe's.

Germany’s trade surplus with the U.S., while nowhere near the scale of China’s, has nonetheless long been a thorn in Trump’s side. Trump has complained to Merkel about the prevalence of Mercedes and BMW’s on American roads, asking why Germans don’t drive more U.S.-made cars.

Merkel can point out that Germany’s trade surplus with the U.S. fell nearly 10 percent last year to just over $60 billion. But convincing Trump to back away from planned tariffs on steel and aluminum will be difficult.

Before Merkel took off for Washington, German officials said they expected the U.S. tariffs, which were announced in March, to come into force May 1. That might be a negotiating tactic, but it could also be an attempt to manage expectations in Germany for Merkel’s trip.

Trump’s chief economic adviser, Larry Kudlow, said Thursday that Washington would consider an exemption for Europe if the EU made concessions on auto tariffs.

“It’s very important that some of our friends make some concessions,” he told CNBC.

Peter Beyer, Merkel’s point-man for transatlantic relations, described reaching Trump with Germany’s arguments as “the main challenge” of Friday’s meeting. Merkel has tried and failed in the past with complex arguments, including detailed statistics about how much German companies invest in the U.S.

“It has to happen in relatively simple language,” Beyer said, adding that Merkel’s team was “well prepared.”

Even so, treating Trump, who takes pride in his business acumen, like a simpleton, could also backfire.

The biggest risk for Merkel is that Trump may have already decided that Germany hasn’t moved far enough in his direction on the issues most important to him, which, in addition to trade, include defense spending.

Last year, Trump even suggested Germany owes the U.S. “vast sums of money” for not paying its fair share of the NATO budget over the years.

Though Germany has pledged to pursue NATO’s spending target for members of 2 percent of GDP and has already increased its defense budget, it remains far away from achieving that goal. Despite a nearly 10 percent increase in the military budget last year, overall spending totaled just 1.1 percent of GDP.

Merkel’s new government has repeatedly pledged to increase military spending, but reaching the 2 percent goal — which would require Berlin to nearly double its defense budget in the coming years — is politically impossible in a country that remains wary of all things military.

That reality is unlikely to make much of an impression on Trump, however. Indeed, even where Merkel had the opportunity to show more solidarity with Washington, such as with the recent airstrikes in Syria, she demurred, expressing only verbal support instead of making even a symbolic military contribution.

Picking up where Macron left off, Merkel will also urge Trump not to abandon the 2015 Iran nuclear deal negotiated by the Obama administration along with France, Britain, Russia, China and Germany — although in parting words to journalists before he left Washington Wednesday, Macron suggested that he had failed to convince Trump that the deal is worth preserving.

Another contentious issue on Friday’s agenda involves Nord Stream 2, a planned gas pipeline from Russia to Germany through the Baltic Sea. The pipeline, the second of its kind, would allow Russia’s natural gas giants to circumvent Eastern Europe when supplying big Western European customers, costing Ukraine and some other countries billions in transit fees.