Germany's plastics and rubber machinery industry released figures March 23 showing that exports to the United States grew 7.6 percent in 2016, to 774 million euros ($835.9 million).
The new statistics from Germany's VDMA trade group showed that the U.S. remained the largest market for German plastics machinery exports, ahead of China, for the second year in a row.
But with the Donald Trump administration now arguing that the overall U.S.-German trade relationship tilts too far toward Germany, that gain in exports may not be the cause for celebration it would have been in years past.
The political climate has prompted the VDMA to engage in a very public defense of Germany's machinery export success, saying it reflects German skill and innovation, not unfair trade.
Trump aides, for their part, have said German exports benefit from a "grossly undervalued" euro.
At a March 17 meeting with German Chancellor Angela Merkel, President Trump said that German trade officials have "done a far better job" in negotiating agreements and that he wanted to "even it out."
While the government discussions have not been directed at the polymer industry, Germany's large plastics machinery industry does run a sizable annual surplus with the United States.
In 2015, the last year figures are available, Germany's surplus was $564 million in plastics machinery, the largest global deficit faced by the U.S. plastics equipment industry, according to a 2016 report from the Washington-based Plastics Industry Association.
In response to the U.S. government complaints, VDMA, based in Frankfurt, has been mounting a defense of German companies.
"The allegations voiced by U.S. President Donald Trump and his advisors against German industry are missing their mark," VDMA said, in a March 13 statement issued four days ahead of Merkel's visit to Washington for her first meeting with Trump.
The group was speaking for all of Germany's equipment manufacturing industry, not just plastics and rubber.
"Our member companies' success in the export sector has nothing to do with wage dumping or currency manipulation, given that wages in the German mechanical engineering sector are actually at the highest level in global comparison," VDMA said.
"Our industry's export strength is a sign of the high quality and innovativeness of mechanical engineering companies in Germany," the group said.
Specific to plastics machinery, Germany's trade surplus reflects that the U.S. market does not have enough production capacity to meet domestic demand, said Thorsten Kühmann, managing director of VDMA's plastics and rubber committee.
The U.S. domestic machinery market is about $4.1 billion (3.8 billion euros) a year, with local production worth $2.6 billion (2.4 billion euros), he said.
The U.S. industry exports $1.4 billion (1.3 billion euros) worth of machinery and U.S. companies import $2.9 billion (2.7 billion euros) worth of plastics machinery, he said.
"Thus, the U.S. plastics industry has no other option than importing machines," he said. "In consequence, the U.S. market faces a trade deficit."
While much of the debate about trade in the United States centers around China and the North American Free Trade Agreement, the U.S. actually has its second-largest deficit in plastics with Germany.
The four segments of the U.S. plastics industry had an overall $2.1 billion deficit with Germany in 2015, trailing only China, where the U.S. had a $9.9 billion deficit.
The next three largest U.S. deficits in plastics were with Taiwan, Japan and South Korea, in contrast with surpluses with Mexico, Belgium, Brazil, Hong Kong and Singapore.
Figures from the Plastics Industry Association show that German plastics materials makers had a $1 billion trade surplus with the United States in 2015. As with machinery, it was also the largest deficit the U.S. plastics materials industry faced globally.
The German plastics products industry had a $505 million surplus in 2015, and German mold makers had a $70 million surplus with the United States.
The head of the Plastics Industry Association noted that globally, the U.S. industry has a trade surplus, in contrast to its deficit with the German industry.
"Globally, the U.S. plastics industry has a positive, healthy trade surplus and the U.S. dollar is strong,” said President and CEO Bill Carteaux, in an email.
At his press conference with Merkel, Trump said he was not an isolationist but a “fair trader.”
"Right now, I would say that the negotiators for Germany have done a far better job than the negotiators for the United States," he said. "But hopefully we can even it out. We don't want victory, we want fairness.
"Germany has done very well in its trade deals with the United States," he said.
But VDMA said that restricting trade would ultimately hurt U.S. citizens because many U.S. companies rely on German and European equipment to be globally competitive.
"Walls, punitive tariffs and import duties would inevitably lead to investors backing off," VDMA said. "It is also highly doubtful that this protectionism will succeed in breathing new life into the fallow industrial regions that count on Trump's promises."
