The itinerary

Friedrich Merz was in Beijing on February 25. He was in the White House on March 3. In between, the United States and Israel started bombing Iran. The timing wasn't planned — the China trip had been on the calendar for weeks — but the sequence tells you something about how Germany is trying to position itself right now, and about the constraints that make it so hard.

Here's the theory, which Merz's people have taken to calling "dual recalibration": reduce Germany's excessive security dependence on the United States while correcting its over-reliance on China economically.^[11] In practice this means: fly to Beijing, make nice, come home with a trade deal, then fly to Washington, make nice, and hope nobody asks you to choose.

The Iran strikes made the choosing part harder.

Beijing

Merz arrived in China with a delegation of about 30 executives — Volkswagen, BMW, Mercedes, the usual suspects — and a bilateral trade deficit of approximately €90 billion.^[14] German imports from China totaled €170.6 billion in 2025. German exports to China: €81.3 billion. The deficit had quadrupled since 2020. German car exports to China fell nearly 70% between 2022 and 2024 and dropped another 33% in 2025.

If you're structuring this as a negotiation, Merz walked in with weak cards. Germany needs China more than China needs Germany, at least on the trade side. Germany also depends on China for rare earth processing, cobalt, graphite, lithium, and most of the materials that go into the energy transition it has committed to. In spring 2025, Beijing restricted rare earth and automotive chip exports, which served as a reminder of who holds which leverage.

The headline deliverable was an Airbus order: China agreed to buy "up to 120" aircraft.^[2] This is useful but not transformative. Beyond that, the signed agreements were mostly in non-controversial areas — climate cooperation, customs facilitation, animal disease control, sports exchanges. Merz raised the trade deficit, industrial subsidies, and market access restrictions. Xi listened. There is no indication that the structural problems moved.

One way to read the trip: a modest success, appropriate for a first visit, laying the groundwork for deeper engagement. Another way: a photo op and a plane order, while the real power dynamic — China as competitor eating Germany's industrial base — continued uninterrupted.^[3]

In any case, Merz left Beijing with, as the South China Morning Post put it, "bargaining chips for a looming Trump trade battle."^[1] This is perhaps the most honest framing. The China visit wasn't really about China. It was about having something to show Washington.

Washington

Five days after Beijing, Merz was in the Oval Office. The context had changed somewhat. The US and Israel had begun striking Iran on February 28. Merz became the first foreign leader to visit Trump after the strikes started.^[4]

Here's what happened at the base level — and I mean that literally.

Spain, as I wrote yesterday, told Washington its bases at Rota and Morón couldn't be used for Iran operations. Fifteen KC-135 tankers flew north. At least seven landed at Ramstein Air Base in Germany. Trump, sitting next to Merz, told reporters that Germany had been "helping out" by letting US forces "land in certain areas."^[5]

Merz declared "full political support" for the US-Israeli strikes. He said Iran "should never get a nuclear weapon." He said: "We are hoping that the Israeli and the American army are doing the right things to bring this to an end and to have, really, a new government in place that is coming back to peace and freedom."

He also urged Trump to end the war quickly, voicing concern about the global economy.

This is the Merz formula: support the principle, express concern about the execution, and ask no uncomfortable questions about what's happening on German soil. The support buys goodwill. The concern provides domestic cover. The silence on Ramstein is where the real decision lives.

The Ramstein question

Here's how Ramstein works, legally. It's an American-administered installation on German territory. German law applies. The NATO Status of Forces Agreement governs the presence of US personnel. The base hosts the US Air Forces in Europe headquarters and has been central to American power projection in Europe and the Middle East for decades.

In July 2025, the Federal Constitutional Court ruled that the German government has no legal obligation to take action against US operations conducted via Ramstein, even when those operations involve drone strikes in third countries.^[10] The ruling was about the US drone program in Yemen, but the logic extends: Germany is not required to police how the US uses German bases.

This is structurally different from Spain's arrangement. Spain has an explicit bilateral agreement with a sovereignty clause that requires authorization for operations beyond the agreement's scope. Germany's framework places the obligation on the US to respect German law — but German courts have essentially ruled that this obligation doesn't create an actionable duty for the German government to intervene.

The mechanism:

1. Spain says: "You need our permission, and no."
2. Germany says: "We don't have a legal obligation to say no, so we won't say anything."
3. The tankers that Spain expelled land in Germany.
4. Merz sits next to Trump and gets thanked for "helping out."
5. Germany has, in practice, enabled the Iran operation — without having to formally authorize it.

If you were designing a system to distribute political risk, this is elegant. Spain absorbs the reputational cost of refusal. Germany absorbs the operational reality of acquiescence. Neither country had to vote on anything. The base agreement did the work.

Of course.

The Spain critique

Here's where it gets interesting — or cynical, depending on your disposition.

Standing in the Oval Office next to Trump, Merz joined in criticizing Spain. His quote: "We are trying to convince Spain to catch up with the 3 per cent or 3.5 per cent which we agreed on in NATO. And as the President said, it's correct: Spain is the only one who is not willing to accept that."^[6]

Later, on German state television, Merz defended himself against criticism that he should have stood up for Spain — an EU member state — against Trump's trade threats. Merz said he had told Trump "in very clear words" at a private lunch that Spain was part of the EU and that it was "not possible to discriminate against it when it came to trade."

The incentive ladder:

1. Trump threatens Spain publicly.
2. Merz criticizes Spain publicly on the NATO spending point (which is factually defensible — Spain was the sole holdout on the 5% target).
3. Merz privately tells Trump you can't embargo a single EU state (which is structurally correct — Article 207 TFEU).
4. Merz gets credit from Washington for being a "helpful" ally.
5. Merz gets to tell Berlin he defended European unity behind closed doors.
6. Spain, meanwhile, is hosting the tankers that Spain expelled.

This is not hypocrisy exactly. It's role differentiation within an alliance. Germany plays the cooperative partner. Spain plays the principled objector. The military operation continues regardless. Everyone gets to tell their domestic audience a different story.

Straightforward.

The defense spending schematic

Merz's credibility on the Spain critique comes from his own defense spending record, which is — on paper — substantial.

In March 2025, the Bundestag passed a constitutional amendment to reform Germany's debt brake. The package created a €500 billion infrastructure fund and, crucially, exempted defense spending above 1% of GDP from borrowing limits.^[8] This was the fiscal precondition for everything that followed.

Germany earmarked more than €108 billion for security and defense in 2026. Merz has committed to reaching 3.5% of GDP for core defense by 2029 and has publicly supported the overall NATO 5% target.^[7]

The comparison with Spain's negotiated exemption at 2.1% is stark. Germany is, at least on the spending trajectory, doing what Washington asks. Spain is not. This gives Merz standing to make the critique.

But there's a second-order observation. Germany's defense spending increase is partly financed by borrowing that previous German governments (including Merz's own CDU under Merkel) refused to allow. The constitutional amendment passed in March 2025 — before Merz took office in May. He inherited the fiscal room. The hard vote was Scholz's.

I might be wrong about this mattering to anyone outside of domestic German politics. But the structural point stands: Germany's current defense generosity is built on a fiscal framework that the CDU spent a decade opposing.

The domestic cost

Merz's Iran stance has not been universally popular at home.

The SPD's foreign policy spokesman said the chancellor's tone was "not very helpful." Sarah Wagenknecht, founder of the BSW party, said Merz was "groveling before Donald Trump." Left Party leader Jan van Aken accused Merz of mocking victims.^[13]

The Irish Times ran a column headlined "Merz abandons Germany's moral certainties as he aligns with Trump on Iran."^[9]

Merz himself acknowledged the uncertainty, saying: "International legal measures and steps Germany has repeatedly pursued for decades have been clearly ineffective against a regime that is developing nuclear weapons and brutally oppressing its own people. We do not know whether the plan to bring about political change from within through military strikes will succeed."

This is, to give him credit, a more honest articulation than most leaders have managed. "We don't know if this will work" is at least epistemically defensible. But the political calculation is clear: the cost of opposing Washington — trade retaliation, lost influence, the Spain treatment — is higher than the cost of domestic criticism from parties that aren't in his coalition anyway.

What this is

Let me try to draw the plumbing diagram.

Merz's strategy has three pipes:

Pipe 1: China. Maintain economic engagement, slow the trade deficit, secure supply chains (rare earths especially), don't provoke Beijing, bring home an Airbus order that plays well in Toulouse and Hamburg. Accept that the structural dependency isn't going away.

Pipe 2: Washington. Be visibly useful. Accept the tankers. Support the Iran strikes verbally. Hit the defense spending targets. Criticize the allies who don't. In exchange: hope for gentler tariff treatment, a functioning EU-US trade deal, and a voice at the table when the war ends.

Pipe 3: Europe. Tell Brussels, privately, that you're defending EU unity. Tell Madrid, privately, that you said the right things at lunch. Finance your defense increase with the fiscal room that Brussels permitted under the infrastructure fund. Keep the European project functional enough to serve as collective leverage against both Washington and Beijing.

The bug is that these three pipes occasionally carry water in opposite directions. Supporting Washington on Iran alienates the domestic constituencies and European partners (hello, Spain) who want a different foreign policy. Engaging China worries Washington, which would prefer a harder decoupling line. Defending European unity while publicly criticizing Spain on NATO spending is — let's say — a messaging challenge.

Merz's bet is that being useful to everyone, at a cost to no one, is a sustainable equilibrium. Maybe it is. Germany has managed this kind of ambiguity before, for decades. The Merkel model was essentially: be indispensable, be boring, offend nobody, and let the Americans handle the hard stuff.

The difference now is that the hard stuff is landing at Ramstein. And "we have no legal obligation to say no" is doing a lot of work as a foreign policy position.

The term sheet

If you were structuring Merz's week as a deal, it looks roughly like this:

Germany gives: verbal support for Iran strikes, Ramstein access for US tankers, public NATO spending pressure on Spain, rhetorical alignment with Washington on defense burden-sharing.

Germany gets: Trump calls Merz "a friend," trade tensions with Washington de-escalated (for now), no trade threats directed at Berlin, first-mover advantage as the "reliable European ally."

Germany avoids paying: troops, direct military participation, formal authorization of operations, any parliamentary vote.

Residual risk: domestic backlash if Iran escalates, European solidarity fractures if the Spain situation worsens, China reassesses the relationship if Berlin looks too aligned with Washington.

Not a bad trade, on the current terms. The question is whether the current terms hold.

Unsatisfying.

---

Things happen

Germany's €500 billion infrastructure fund has a 12-year spending window. German car exports to China fell 33% in 2025. The BBVA-Sabadell takeover failed. The EU-US trade deal ratification is paused. Turkey also refused basing requests for Iran operations. The UK initially refused, then allowed base use. Merz visited Unitree Robotics' humanoid robot lab in Hangzhou; no deals were announced. The Bundesverfassungsgericht's Ramstein ruling has not been appealed. Spain's IBEX recovered by midday on Wednesday. Germany's next federal election is scheduled for 2029.