A surplus can also be a weakness.

Yesterday the US confirmed 25% tariffs on steel and 10% tariffs on aluminium imports from Europe, Mexico and Canada. Leaders of all these nations have vowed retaliation. "My philosophy is that all foreigners are out to screw us, and it's our job to screw them first," said John Connally, then US Secretary of the Treasury, in 1971. "What distinguishes today's situation from the one Europe faced in the 1970s is the Weimar-like implosion of Europe's political centre," wrote Prof Y Varoufakis. "In the 1970s, America's financial assault on Germany, France, and Britain was met by a united European establishment." By contrast Europe is divided today. Britain is negotiating an exit from the European Union, known as Brexit. In Italy the far left Five Star movement and the right wing League, united by their opposition to immigration and the Euro, won general elections in March. After President Sergio Mattarella vetoed the choice of Paolo Savona as economy minister the two parties decided on Prof Giovanni Tria, to avoid fresh general elections. A crisis in Italy will be too much for Europe to handle, said the Finance Minister of Latvia. Earlier this month Donald Trump decided to withdraw from the Iran nuclear deal. "Forced to insist that Germany would uphold the Iran deal, Merkel found herself immediately humiliated as one German company after another pulled out of Iran." Why? Because they are scared of the financial might of the US and "the tax cuts Trump had delivered to almost 5,000 German companies with a combined balance of $600 billion." Varoufakis was briefly Finance Minister of Greece when Germany insisted on austerity to balance its budget, which was extended to all of Europe including Italy. "Then note that this pan-European austerity drive took place against the backdrop of excess savings over investment. Finally, note that large excess savings and balanced government budgets mean large trade surpluses -- and thus the increasing reliance of Germany, and Europe, on massive net exports to the US and Asia." Germany recorded a budget surplus of 38.4 billion Euros in 2017, with unemployment down to 3.7% and an inflation rate of 1.8%. Germany has saved 300 billion Euros since 2008 because of low interest rate in the Eurozone and benefits from not having its own currency, which would have become stronger against other currencies, making its exports more expensive. Meanwhile, China is busy strangling smaller countries in debt, making them vulnerable to a global trade war. Even as Trump prepares for a meeting with Kim Jong-un China will never allow North Korea to give up its nuclear weapons. It has been using North Korea as its human shield by supporting the Kim dynasty and keeping it dirt poor. In all this confusion Europe seems to have the weakest hand.