German Chancellor Olaf Scholz has undertaken a wide-ranging itinerary of foreign travel in recent weeks, including official trips to Latin America and Asia. But his most important foreign trip as leader so far comes on March 3, when he will meet US President Joe Biden at the White House.
In the post-war era, Germany’s alliance with the US has long been a strong one but it became extremely frayed during the presidency of Donald Trump. The personal relationship between Trump and former Chancellor Angela Merkel might have been the worst, by some stretch, of any between leaders of the two countries. Trump even appeared to refuse to shake Merkel’s hand during a press conference after their first meeting in 2017.
In addition to their personal differences, Merkel also got a rocky ride from Trump on several long-standing issues related to the bilateral relationship between their countries, especially trade and defense spending, about which previous US presidents had been more sanguine in public.
On trade, Trump described Germany as “very bad” because of its significant trade surplus, meaning exports that exceed imports. In particular, he singled out the German automobile industry and threatened to impose tariffs on exports.
A second sore point for Trump was Germany’s failure to spend at least 2 percent of its gross domestic product on defense spending, a key target for NATO members. While Germany has expanded its foreign missions in recent years, from Mali to Afghanistan, its post-war disinterest in military force has been a longstanding driver of relatively low levels of defense spending.
Since Biden and Scholz took office, they have sought to restore the US-German relationship, which both consider very important. In the eyes of the US president, the importance of Berlin has only increased in the post-Brexit landscape, given its central role in EU affairs.
Equally, Scholz acknowledges the continuing importance of the US to Germany. This has been especially true in the year since Russia’s invasion of Ukraine, during which he has sought to remain in lockstep with Washington on key decisions, including the agreement to send tanks to Kyiv.
Ukraine will be high on the agenda for Scholz’s meeting with Biden on Friday, given the continuing uncertainties about the months ahead as the conflict apparently remains locked in a war of attrition. The two leaders will also review bilateral cooperation on other security issues, including the challenges presented by China.
Within the agenda there will be much on which the two leaders can agree. However, despite the better personal relationship between Biden and Scholz compared with that of Trump and Merkel, there are several festering issues that remain irritants to bilateral ties.
The first is the continuing caution that has characterized Germany’s policy on Ukraine compared with some other Western allies. Certainly, Scholz has made some wide-ranging policy changes in the year since the Russian invasion, in areas including energy and defense.
However, tensions persist between Berlin and some other key allies about the pace and scope of Western support and strategy for Kyiv. This was revealed by initial disagreements between Scholz and Biden over providing tanks to aid Ukrainian forces, which threatened the unified allied effort.
A second point of contention is China, with Biden’s administration concerned about the German policy pertaining to the emerging market giant. In November, Scholz became the first leader of a G7 nation to visit China since the start of the pandemic, which was a reflection of the importance Berlin places on its trade ties with Beijing. Between January and June 2022 alone, German businesses invested more than €10 billion ($10.5 billion) in China, according to the German Economic Institute.
While Scholz’s trip was largely uneventful, it gave rise to perceptions of intra-Western splits over China. Germany, especially under the long chancellorship of Merkel, had long been the primary advocate of Western economic engagement with Beijing.
That long-standing strategy on China has come in for much stronger criticism since Merkel left office in December 2021. The perception that Scholz might be seeking to keep much of her policy on China intact has been widely criticized. For example Ivo Daalder, an Obama era former US ambassador to NATO, warned that Germany is “headed for a collision” with the Biden administration on the issue, not least because of China’s qualified support for Russia over Ukraine.
Another issue complicating bilateral ties is the US Inflation Reduction Act. This landmark legislation was initially welcomed by key EU stakeholders, including European Commission President Ursula von der Leyen.
However, it subsequently triggered a huge transatlantic row over the massive amount of green-energy subsidies given to US industry, especially in the context of high energy costs in Europe since Russia’s invasion of Ukraine.
The issue has caused much alarm in Germany — in particular, when Robert Habeck, the vice chancellor and minister for economic affairs and climate action, said a few weeks ago that there was urgent need for an intensified European “industrial policy that enables our companies to thrive in global competition, especially through technological leadership.”
Taken together, all of this underlines why the visit to Washington will be a tricky one for Scholz. US-German ties are stronger now than they were during the Trump era but multiple pitfalls remain that could threaten Biden’s overarching goal of fully restoring the Western alliance following the divisions that characterized his predecessor’s presidency.