Donald Trump started the new week on Twitter by railing against Mario Draghi after the president of the European Central Bank had announced that he was considering lowering interest rates as part of a stimulus package: “Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.”
Altogether, Trump devoted four tweets to his complaints about ECB strategy and he managed to use a variation of the word “unfair” in three of them. Apparently, the American president is upset that European economists are not implementing the principle of “America First” when making their policy decisions. Trump also tends to view economics in simple terms, as a zero-sum game, which means that gains made by any other country automatically result in losses to the U.S. economy.
Speaking at the ECB Forum on Central Banking in Sintra (Portugal) later in the day, Mario Draghi – or “Mario D” as Trump calls him in one of his tweets – indirectly responded to Trump’s accusations by pointing to the ECB’s mandate to ensure price stability in the eurozone and very clearly stated “we don’t target the exchange rate”.
Domestically, Donald Trump has been complaining about the Fed’s policy of what he calls “quantitative tightening” for a while now and perhaps his rantings on Twitter were designed to send a message to the Federal Reserve’s chair Jerome Powell in order to bully him into being more like “Mario D.” The Fed announced on Wednesday that it is leaving rates unchanged.
All in all, Donald Trump seems to approach international trade in terms of a war rather than a mutually beneficial give-and-take and he is always quick to espy enemies rather than partners. Monday’s tweets make it quite clear that the EU has firmly landed on the enemy list, along with “China and others”. In his string of tweets in which he aired his grievances on Monday, Trump singled out Germany with which he appears to be having a strange love/hate relationship: “German DAX way up due to stimulus remarks from Mario Draghi. Very unfair to the United States!”
I have a personal theory about the origin of this less-than-friendly relationship. Considering that to Donald Trump everything is personal, it seems possible that Angela Merkel’s rather cool reaction to his surprise election win may have doomed German-American relations in the Trump era from the beginning. In contrast to Vladimir Putin, who gave Donald Trump a metaphorical pat on the shoulder for winning the election, the German chancellor quickly proceeded to lecture the newly elected American president on what was expected of him after a few quick congratulatory words. Perhaps that is why Germany and the rest of the EU now has to fear being hit by an increasing number of tariffs imposed by Donald Trump. That said – I don’t blame Angela Merkel for what she did. Not one bit.