Categories: Market Overview

U.S. and German relations at a crossroads as Afghanistan crisis unfolds

After four years of tension under former President Donald Trump, the relationship between the United States and Germany was already at a crossroads. Now, experts say the ongoing crisis in Afghanistan could add fuel to the fire. The election of President Joe Biden in November boosted hopes of a transatlantic realignment between the two economic powerhouses, but analysts say that despite some encouraging rhetoric, many key issues have yet to be addressed.

“We see a lot of positive signs: there were great moves from the Biden administration, there was a lot of communication and dialogue with visits back and forth and [German Chancellor] Angela Merkel having been in Washington. So that is absolutely positive — although we do not have yet tangible results,” Simone Menne, president of the American Chamber of Commerce, told CNBC earlier this month.

The European Union, which has Germany as its largest economy, announced in May that it was not going to introduce a previously planned second round of tariffs on U.S. products. The move was designed to allow for dialogue over steel and aluminum duties that were imposed during the Trump presidency. But Europe’s trade chief, Valdis Dombrovskis, told the FT in July that a future deal might fall short of the mutual suspension of all tariffs.

In addition, the EU decided in June to open its doors to U.S. travelers as the health situation improved in both regions. However, Biden has not yet taken the reciprocal step, which has upset some European officials. More recently, Biden’s decision to withdraw American troops from Afghanistan and the ensuing rapid takeover of the country by the Taliban has angered many in Europe. Some politicians, including in Germany, see these developments as a problem for the political and moral credibility of Western nations.

U.S. and German relations at a crossroads as Afghanistan crisis unfolds, CNBC, Aug 24

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