Donald Trump's main trade adviser Peter Navarro's accusation that Germany is manipulating the euro reveals a lamentable misunderstanding of a key trading partner.
Mr Navarro, soon to head a new US National Trade Council, told the Financial Times that "Germany continues to exploit other countries in the EU as well as the US with an 'implicit Deutsche Mark' that is grossly undervalued."
It would come as a major shock to most Germans to learn that the euro is an implicit Deutsche Mark or they are using it to exploit anyone.
It is true that at the moment the European Central Bank is pursing a policy of quantitative easing, which is keeping the euro low.
But this is because the ECB is trying to stimulate the economy to hit its inflation target which it has missed for the past four years. Unemployment in the eurozone is also stubbornly high at 9.8 percent. The ECB is behaving exactly like the US Federal Reserve.
The US was not complaining before 2012 when, under German pressure, the ECB was raising rates while the Fed was going full-throttle on its own quantitative easing and the euro skyrocketed.
Second, Germany is not the eurozone country that wants a low euro and has no power to make it happen if it did. Germany has just one seat on the 25-member board of the European Central Bank, which sets monetary policy.
The ECB, which is incidentally run by an Italian, is running a policy of QE not for Germany but to support the weaker economies like Italy and Greece.
Germans, for whom inflation has been anathema since the Weimar and post-war hyperinflations, hate this.
With inflation and asset prices trending higher in Germany, finance minister Wolfgang Schaeuble and Jens Weidmann, the German representative on the ECB board, say that monetary policy is too soft for the strong German economy.
Third, it is true that the common currency has provided an implicit advantage to efficient German producers. But it is, on the other hand, too high for manufacturers in other eurozone countries. The industrial sectors of Italy and France are being hollowed out by the euro, which has to be managed to placate German inflation nutters. Alt-right parties like Marine Le Pen's in France and Beppe Grillo's Five Stars in Italy want to leave the euro precisely so their currencies can devalue and become export power houses again.
The same tensions are visible in Australia, where the currency is arguably too low for booming NSW and too high for post-mining boom WA.
America would face much tougher trade competition from these countries if Germany left the euro. There is a gain as well as a loss for the US in the eurozone.
Last, the low euro is only one factor in the success of German exporters, who tend to make niche products high up the value chain, like Mercedes Benz's and precision medical equipment, where price is much less of a factor.
Navarro's distortion of the facts is perhaps deliberate, designed to justify a trade policy of fracturing the eurozone and the European Union, which has been a tough negotiating opponent in trade talks
The idea seems to be that individual EU countries will be easier to intimidate in trade talks. It is a high-risk strategy indeed.
