Trump Faces Merkel's Art Of The Deal

Angela Merkel and Donald Trump meet for the first time in the White House on Friday.
Angela Merkel and Donald Trump meet for the first time in the White House on Friday.

By Daniel Hamilton and Niklas Helwig

Two different world views will be on display this week when German Chancellor Angela Merkel comes to Washington to face Donald Trump for the first time.

Trump preaches ‘America first’, characterizes the European Union as a ‘vehicle of German interests’, has accused Merkel of "ruining Germany" with her open-door refugee policy, and says he will start off by trusting her as much as he does Russian President Vladimir Putin.

Merkel champions multilateral cooperation, has maintained an often-tempestuous European solidarity through a series of severe crises, has held together international sanctions on Russia, and told Trump that any "close cooperation" with Germany must be based on ''values of democracy, freedom, respect for the rule of law and human dignity, regardless of origin, skin color, religion, gender, sexual orientation or political belief."

It would be easy to say “Let the fireworks begin.” Yet both Trump and Merkel have an interest in making their relationship work. And despite their differences, each values the art of the deal. Trump's deal-making is already legend. But Merkel is no slouch either.

Just ask Greece. Merkel has kept financial assistance flowing to the highly-indebted country and has pledged to ''do what it takes'' to keep Greece in the eurozone, while at the same time holding out further debt relief unless Athens implements painful economic reforms. The deal is not popular and is under strain. But it is holding.

The migration crisis is another example of Merkel deal-making. After over 1 million refugees and migrants entered Europe in 2015, Merkel struck a deal with Turkish President Erdogan, who accepted even more migrants and shut down the refugee stream to Europe in exchange for German support for visa-free travel for Turkish citizens and a revival of Ankara’s EU membership talks. Recent tensions between Berlin and Ankara with Erdogan underscore the precarious nature of this bargain as well. But the deal still stands.

Merkel is likely to approach Trump in similar results-oriented manner. A new German-American bargain will turn on three issues.

The first is security. The fight against ISIS, one of Trump's top priorities, is also high on Merkel's agenda. Like other European countries, Germany has come under terrorist attack and is exposed to the risk posed by radicalized fighters returning from Syria. Without U.S. support, Germany is vulnerable; Berlin relies on U.S. intelligence to uncover terror plots. But Berlin is also contributing to the fight. It is a member of the anti-ISIS coalition in Syria and Iraq and has contributed airplanes and ships providing logistic support.

Merkel is also likely to react positively to Trump's call for Germany to step up its defense. She has already boosted German defense spending, and German forces are now in Lithuania leading a NATO effort to reassure eastern allies nervous about Moscow.

The second issue is the economy. Trump has railed against Germany's large trade surplus in goods with the United States. But that deficit, while still sizable, declined by $10 billion last year, and is partially offset by America's trade surplus in services with Germany. Moreover, 4,000 German companies have invested $224 billion in the U.S. and directly employ 700,000 U.S. workers. And 40 percent of all jobs created by German companies in the U.S. are in manufacturing, compared with 9 percent in the economy as a whole. A big trade deal with the European Union is unlikely in the near term, but sector-by-sector deals could boost U.S. and European corporate competitiveness in the face of Chinese restrictions and efforts to subvert basic market economy principles.

Russia is likely to be the most difficult issue. A Trumpian pivot to Moscow would leave Merkel isolated, undermine her efforts to maintain EU sanctions on Russia, and challenge her efforts to implement the Minsk roadmap addressing Russia's aggression in Ukraine. But the swirl of controversy surrounding Trump campaign contact with Moscow makes such an abrupt pivot difficult. In this situation, Trump may be amenable to Merkel's approach. She has been strong in criticizing Russian aggression and taken steps to reassure worried NATO allies, yet has sought to avoid an open breach with Moscow and signaled that cooperation is possible on other issues.

A new Merkel-Trump bargain will be difficult to achieve and perhaps even more difficult to implement. Still, Merkel, like Trump, has always been underestimated by her critics. And through three terms as Chancellor she has learned her own art of the deal.

Dr. Daniel Hamilton is the Austrian Marshall Plan Foundation Professor and Director of the Center for Transatlantic Relations at the Paul H. Nitze School of Advanced International Studies (SAIS), Johns Hopkins University. Dr. Niklas Helwig is a Transatlantic Post-Doc Fellow for International Relations and Security (TAPIR) at the Center for Transatlantic Relations.