[By Guenter Schuher, columnist at Guancha Insight]

One

Today, most of Germany's ruling figures are from my generation—I am about to turn 52. When they look at the current actions of the Trump administration, such as imposing tariffs and threatening to withdraw from NATO, they do so with a growth imprint similar to ours.

I was born in West Germany in 1973 and grew up during the Cold War. My view of the world in childhood was clear and simple: West Germany was the designated battlefield for "World War III" (which seemed more real than we could have imagined), and we relied on the military protection of American friends and allies. I clearly remember discussing in elementary school with classmates how likely it was that we would win in an armed conflict. It was a terrifying time, and we believed that good and evil were clearly divided, and we were undoubtedly on the right side of history.

In the mid-1980s, when I was a teenager, I first began to question transatlantic friendship. When the Soviet Union deployed SS20 missiles, the United States planned to deploy "Pershing II" intermediate-range nuclear missiles in West Germany, which led left-wing parties, the Green Party, and other peace advocates to strongly protest, while conservatives mostly supported the arms race.

US "Pershing II" intermediate ballistic missile. Photo source: Wikipedia

When I lived with a family in rural Florida at the age of 16, I saw a lot of Americans' extreme ignorance and indifference toward other countries, including Germany, in their local high school. Questions like "Do you Germans have cars," "Do you ever run into Hitler or his relatives while shopping," and "Do you drive or take a train to come to the US" made me doubt whether it was wise to let such voters elect a government to act as the "world police."

After returning to Germany, I witnessed the anti-war attitudes of our generation during the First Gulf War. At that time, the two Germanys had just unified, and the Soviet Union had recently dissolved. Even joining Russia to NATO was not unimaginable. We Germans yearned for peace dividends and urgently hoped to improve relations with all eastern neighbors, including Russia.

During the Second Gulf War, the majority of Germans, including then-Chancellor Schroeder, opposed the war. The Bush Republican administration was considered a threat to world peace and generally seen as an incompetent joke. This period not only strengthened Franco-German relations but also promoted unprecedented unity in Europe—of course, the UK has always been the exception in Europe.

Therefore, the Democratic administrations led by Obama and Biden enjoy much higher prestige in Germany, thanks to their worldview aligning more closely with Germans on issues like gun control and abortion, as well as the transatlantic partnership. If Germans were to vote for the US president, Trump would at most receive less than 20% of the votes, and his supporters would almost exclusively be far-right elements.

The high-ranking politicians in Germany and Europe firmly believe that Trump's election was a complete disaster. His so-called determination to end the Ukraine conflict is actually seen as a threat to the foundation of NATO, meaning the US might withdraw its protective umbrella, leaving Europe to face the mess of the Russia-Ukraine war alone.

To Europeans, the credibility of the US has collapsed. Photo source: AP

Sadly, as I mentioned earlier, during the German election campaign in February 2025, despite the fact that Trump's election would inevitably cause chaos in the defense system and tariff policies, this issue was never seriously discussed. If there is any "advantage" to Trump, it is that he never hides his plans and follows through on his words. Therefore, the bitter fruit we are now hastily dealing with is entirely of our own making.

We really didn't expect Trump to implement his agenda with such lightning speed and overwhelming force. Many commentators described Trump as an economics-ignorant madman. Although I don't agree with this description, I must admit that Trump's disregard for stock market turmoil is shocking compared to his previous administration, where the stock market performance was often used as a measure of policy success or failure.

In a democratic political system, politicians dread touching people's wallets, and Trump's policies at least in the short and medium term are exactly doing this: inflationary pressure seeping into daily life, millions of Americans checking their 401K pension accounts realizing that if the market doesn't stabilize quickly, they may need to work another year or even years longer.

Different from his first term, this time Trump came prepared—he not only firmly believed he would win but also spent four years meticulously preparing. His brain trust isn't just made up of Fox News anchors, charlatans, and sycophants (though these types still exist). Although he remains mired in delusions of power, he at least outwardly believes that the U.S. still has the ability to coerce all nations—even if it means taking on the world alone when necessary. Unlike the Democrats' habitual hypocrisy, he doesn't hide his ruthless self-interest logic: in his eyes, fair trade is merely wishful thinking for the weak.

In my opinion, although these explanations make sense, they are only part of the picture. Given that each factor will have a chain reaction on Germany and Europe, we should plan ahead now.

Two

So how can we reasonably explain the policies Trump is pushing? Regardless of whether there are sufficient reasonable reasons behind Trump's actions or what unintended consequences these actions may bring, at least people should realize that everything Trump implements has a purpose.

My core argument is that the U.S. has actually reached its limits in both fiscal and military terms—China is a strong competitor in both areas.

We have reached what some scholars call the "Kennedy Moment": British historian Paul Kennedy pointed out in his influential 1987 book, "The Rise and Fall of the Great Powers," that when military ambitions exceed economic capacity, superpowers decline due to "imperial overstretch."

This has been simplified into a more intuitive formula—"when debt servicing costs exceed defense spending, a crisis arises." The U.S. is currently in this situation, and the situation will only worsen. Externally, the U.S. acknowledges the need to shift its military focus to Asia, reconcile with Russia, and offload defense burdens onto Europe. However, I believe the Trump administration is also aware that even this is unsustainable financially.

I have repeatedly mentioned the inevitable "debt death spiral" phenomenon and have always doubted the strong demand for U.S. debt from foreign institutional investors. Trump's establishment of the Department of Government Efficiency (DOGE) to cut costs and impose tariffs to enrich government coffers suggests he fears a catastrophic collapse of the debt bubble occurring during his term—it is possible, and the likelihood may increase if he continues to implement more measures.

Trump's desire to balance the U.S. trade deficit while maintaining the dollar's status as the world reserve currency is inherently contradictory. Reserve currencies must remain globally liquid, allowing the U.S. to exchange printed green paper for physical goods. Former French President Giscard d'Estaing called this "exorbitant privilege," which completely contradicts Trump's assertion that "the whole world is exploiting America." This also explains an observation I made in the 1980s and 1990s: why ordinary Americans could maintain a consumption level far beyond their production capacity for a long time—they consumed a value far greater than what they created. Now Trump wants to actively weaken the dollar, which, although helpful for rebalancing trade, accelerates the global de-dollarization process.

Trump attempts to force foreign companies to relocate their production lines to the U.S. rather than watch their products lose competitiveness due to import taxes. This strategy might work for export-oriented Germany, as German companies are already keen on investing in the U.S. For example, BMW Group is now exporting multiple models from its largest factory in Spartanburg, USA, back to Germany, and Siemens and other major German corporations have the highest direct investment scale in the U.S. among overseas markets. Imposing tariffs will undoubtedly strengthen this trend.

However, Trump's erratic approach to governance is poison to business decisions that require long-term planning. Decisions involving billions of dollars require time to mature, and building factories and starting production takes years.

Biden tried to attract companies with the Inflation Reduction Act's huge subsidies, while Trump wanted to force Germans to buy more American goods—from chlorine-washed chicken that doesn't meet EU health standards to authentic American cars. Even professional importers admit that the poor sales of American cars in Germany are not due to price issues but aesthetic differences: we neither have space to park large pickup trucks nor the environment or fuel tax policies to support big-displacement "gas guzzlers."

Trump's rude and arrogant communication style backfires—German consumers and civil organizations are instead more actively seeking European alternatives. The most representative case is Tesla: in February, its sales in Germany fell by 76% year-on-year, and 94% of 100,000 surveyed Germans clearly stated they would never buy Tesla electric vehicles. Meanwhile, registrations of non-Tesla electric vehicles in Germany increased by 32%, creating a stark contrast.

Reuters reported: Tesla's sales in Germany plummeted in March, slightly declined in the UK

In general, the EU still holds the upper hand in transatlantic trade. So far, the EU has chosen a cautious response—not ignoring the tariff offensive but not retaliating like China either. Similar to the trade war during the previous Trump administration, Europe attempted to demonstrate its stance by taxing emblematic products originating from Trump's key electoral districts, such as whiskey and Harley-Davidson motorcycles.

The EU also pointed out that while the U.S. achieved a trade surplus of $1.21 trillion in goods with other trading partners in 2024, its service trade surplus increased to $29.3 billion, growing by 5%. Due to the lack of autonomous PC/smartphone software, trade platforms, social networks, and artificial intelligence ecosystems comparable to those of China and the U.S., American tech giants like Google, Meta, and Amazon dominate the European market. These enterprises even "export" profits shamelessly—certain EU member states (such as Ireland) offer ultra-low corporate taxes to attract headquarters, allowing tech giants to transfer taxable profits from actual business locations to tax havens through royalty fees, resulting in near-zero actual tax payments in major markets like France and Germany.

Europe is contemplating reforms to this system; if the trade war escalates, it may consider introducing a digital services tax. This will inevitably provoke dissatisfaction from Trump's tech oligarchs, such as Elon Musk openly proposing the ultimate vision of establishing a U.S.-EU free trade zone.

Additionally, there are proposals to use tariffs as bargaining chips to coerce U.S. Treasury bondholders into rolling over bonds into new zero-coupon or ultra-low-interest bonds with maturities of 50 or 100 years. This essentially amounts to indirect default—only preserving nominal propriety. The UK and Luxembourg, second only to Japan and China as foreign holders of U.S. Treasury bonds, would never accept being indirectly deprived of their assets. They are more likely to sell all bonds rather than accept rollover, which would completely destroy the dollar system and leave the U.S. government in dire straits regarding (re)financing. However, the overall scenario remains overly detached from reality.

Another strategy of the Trump administration might be to force allies to fully align with the U.S. on China policy. This is undoubtedly an American policy goal, but the EU has repeatedly made it clear that it has no intention of establishing exclusive relationships with any party.

So far, American pressure has ironically backfired—for instance, Japan and South Korea are negotiating enhanced economic cooperation with China, which is rarely heard of in previous years. Interestingly, in public debates in Germany, "legacy issues with China" have suddenly been described as commercial matters, such as free market access, while the "systemic" opposition and so-called human rights issues emphasized by the previous government have virtually disappeared. Simply put, when China maintains a stable and familiar image and contrasts favorably with the increasingly unappealing Atlantic side, China suddenly appears more attractive.

This time, Germany explicitly rejected alignment with China

Moreover, if tariffs are levied as a bargaining chip for certain benefits, it implies that tariffs must be reduced again as a return, rather than bringing manufacturing back.

Therefore, I believe that Trump's true core goal is to keep tariffs "high for a longer period." This is not for reviving manual labor jobs, because even without considering cost, the U.S. labor market simply cannot provide enough manpower. The deeper intention lies in the impending manufacturing revolution, which will achieve overwhelming industrial upgrades through robotics and artificial intelligence on the basis of existing automation. The U.S. aims to seize the commanding heights of this transformation. Although this development model is compatible with high wage levels, it must make the scale of domestic manufacturing the core engine of progress. Rebuilding sufficient capacity before the revolutionary wave arrives is no easy task, perhaps explaining why he adopted such an impetuous approach.

The motives hidden behind this technological and economic logic are likely even more sinister.

Germans know that we lost the two world wars not because of technological backwardness or lack of excellent soldiers; the real killer was that we faced an alliance system with stronger industrial bases and raw material reserves. At least, once the U.S. joined the enemy camp and converted its civilian industrial giant to wartime production, the outcome was already determined.

Now, China is the civilian industrial giant, and the U.S. has just experienced how quickly a munitions depot can be depleted in conventional warfare—even possibly surpassed in production capacity by a rival like Russia. Recently, I listened to an interview with tech tycoon Peter Thiel, who, being extremely right-leaning and politically active, subtly conveyed a view in his words: the U.S. must accept some sacrifices to regain sovereignty over its military-industrial production. Shipbuilding is a perfect example; in such cases, even revisiting the strategic importance of "old economy" heavy industries like steel makes logical sense.

Trump's geopolitical games in the Western Hemisphere—from Panama, Canada to Greenland—if not mere scandals to obscure the policies he truly intends to push forward, are likely related to this military argument.

Three

As Europeans, we acknowledge that we do "ride the coattails" in defense spending, but we naturally feel indignant in the face of other demands and outright threats. There is a reason why France offered military support to Denmark in Greenland. One could say that Trump destroyed the reputation the U.S. built since World War II—or even longer—in just 100 days of his presidency.

Germans indeed recognize that Trump won the election fairly and that his proposals during the campaign were correct. Therefore, this at least presents half of the true U.S., and the voices claiming that without Trump, the U.S. would return to "the good old days" are no longer tenable.

The loss of trust in the U.S. has left Germany in a state of panic, leading to unprecedented exemptions—allowing defense spending exceeding 1% of GDP (even without an upper limit) to be excluded from the highly controversial "debt brake" mechanism mentioned in my previous article.

Immediately afterward, Chancellor Merz crafted one of Germany's most severe election lies. For years, conservatives have steadfastly opposed relaxing debt constraints, yet after winning the election, they manipulated parliamentary votes to approve approximately €2 trillion in new military and civilian infrastructure debt. Not only the defense industry, but many sectors see this as a major opportunity to redirect capital and labor to German manufacturing.

For various reasons, I oppose this general consensus. Military spending is essentially a misinvestment because the assets produced do not create value—ideally, they only need to serve a deterrent role and should never be used; even if employed, it is only for destructive purposes.

The inefficiency of Germany's defense budget usage is evident: our budget during peacetime with Russia is almost identical, yet our army has little to boast about. We can't help but wonder if today's Europe would lose to Russia in a military arms race, just as the Soviet Union lost to Reagan's administration.

In fact, Portugal has canceled its F-35 order from U.S. defense companies, and Denmark and others are considering terminating their purchase of "Patriot" missile systems. Moreover, we should not forget to strengthen diplomatic efforts. For years, we have been unable to conduct negotiations with Putin, yet now we complain about having no seat at the negotiation table, but every war ends at the negotiation table.

Evidently, due to numerous unforeseen consequences, the success of Trump's policy ideas remains uncertain. This is sometimes akin to an "Hail Mary pass" in American football—desperate teams throw the ball blindly into the opponent's end zone, praying that teammates catch it. Either all wins or all loses, and sitting idly by guarantees defeat.

"Hail Mary pass"

Germany once had a leader who risked the future of his people to change the world and leave a mark in history. Although the outcome is well-known, Trump and some of his aides clearly admire certain elements of Germany's past—for example, Trump demands absolute loyalty from subordinates akin to Hitler's generals, and Musk openly performs the Nazi salute. These symbolic actions conceal a more important and dangerous ideological worship: the strong have the right to mercilessly eliminate the weak like natural law.

Policies like tariffs can be reversed in an afternoon; decisions like Supreme Court justices will influence the next few decades; and the damage to America's reputation in Europe will probably take generations to repair.

At least for a period, German society will consciously reduce its pursuit of the "American way of life." Companies will consider investing in U.S. factories but will proceed cautiously, not rushing in. They have always done so. If necessary, Europe will retaliate with a digital tax; businesses are already evaluating the feasibility of replacing American products with native software for security reasons. Countries are building autonomous defense systems: France and Germany are accelerating the integration of defense companies and considering purchasing more local products in the future—all of which must be synchronized with strengthened diplomatic efforts and timely lifting of sanctions after the end of the Russia-Ukraine war.

Despite the sharp rise in German debt increasing bond yields, relatively speaking, a large amount of capital is "selling America" and viewing European stocks and bonds as alternatives. As early as before Trump's election, we were already focusing on this and reaching a trade agreement with Mercosur.

A critic once analogized: like parents finally driving their children out of the house to learn independence, this growth lesson that should have been autonomous is now forcibly accelerated by Trump. A new balance may be achieved: reduced U.S. influence, partial progress in Europe, and improved relations with China and Russia from the bottom. The current challenge is whether this can be achieved solely by core EU countries when peripheral states like Hungary are increasingly moving eastward? It's too early to draw conclusions now.

But it is certain that Trump has caused permanent damage to U.S.-European relations.

When former German Chancellor Schroeder and the French president firmly refused to follow the U.S. in launching the Second Iraq War, he warned citizens against falling into superficial anti-Americanism. A political satirist responded: "That’s true, but my anti-Americanism has always been profound." For an increasing number of Germans and Europeans, Trump ensured the truthfulness of this statement.

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Original link: https://www.toutiao.com/article/7500753244788900390/

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