Donald Trump isn’t always wrong. His administration correctly determined that Germany’s massive trade surplus is a problem. Too bad the US president seems destined to make things worse.
Germany’s stubborn adherence to tight fiscal policy has been robbing the world of economic growth for years. The most recent evidence arrived via the International Monetary Fund’s (IMF’s) latest review of the current-account balances of the world’s 29 largest economies. Germany stands out as the guiltiest of a small group of guilty parties, as it has pulled away from China atop the table of the world’s biggest trade surpluses. The contest no longer is even close: China’s surplus shrank to 1.7 percent of GDP in 2016 from 2.7 percent the previous year, while Germany’s was 8.3 percent of GDP last year, compared to 8.6 percent in 2015.
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