- The EU announced in May that it was not going to introduce a previously planned second round of tariffs on U.S. products. But Europe's trade chief has said a future deal might fall short of the mutual suspension of all tariffs.
- 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.
LONDON — 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.
"There are still a couple of things to solve, which means the tariffs on steel and aluminium, which means the travel ban and the exchange of data," she added.
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.
For Germany's part, its government also decided to go ahead with a gas pipeline from Russia, the Nord Stream 2 project, despite opposition from U.S. politicians.
"The U.S.-German relationship has changed on tone but not yet on substance," Carsten Brzeski, economist at ING Germany, told CNBC via email.
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.
Though Merkel has not publicly criticized her American counterpart, she said the developments in Afghanistan were "bitter, dramatic and terrifying," according to German media.
Her successor as leader of the conservative CDU party, Armin Laschet, went a step further, saying that the withdrawal of international troops is the "biggest debacle that NATO has suffered since its founding."
Germany is now realizing that the Biden administration is clearly EU-friendlier and uses a more polite tone but still keeps the US first and the rest of the world second.Carsten Brzeskieconomist, ING Germany
"The political cost of this situation for Merkel and her government is going to be high. That cannot reflect well on the relationship between the United States and Germany," Erik Jones, professor of European studies at Johns Hopkins University, told CNBC via email.
He added, however, that "both governments are going to be too distracted with the domestic consequences of the Afghan situation to worry much at the moment about the implications for their bilateral ties."
Brzeski added that, "Germany is now realizing that the Biden administration is clearly EU-friendlier and uses a more polite tone, but still keeps the U.S. first and the rest of the world second."
U.K. Prime Minister Boris Johnson has called an emergency meeting of the G-7 on Tuesday to coordinate Western leaders' responses to the crisis in Afghanistan.
But not everyone is convinced that a coordinated is possible.
"The pace of events [in Afghanistan] took everyone by surprise," Tina Fordham, head of global political strategy at Avonhurst, a consultancy firm, told CNBC's street Signs on Monday.
The reality is for some years now, as most clearly evidenced by the uncoordinated response to the pandemic, the leading nations of the G-7 haven't been able to agree on a common framework for approaching very many problems."
She said Western leaders will want to be seen to prevent the worst of a humanitarian crisis in Afghanistan, but that any action could have far-reaching consequences.
"What I think is not appreciated as much as it should be, either by market participants or by G-7 leaders, is how this advance with the fall of Afghanistan could be quite a pivotal one for political risk for our own domestic environments," she added.