A new chapter in the U.S.-Germany spying scandal drastically threatens the United States' relationship with Germany. As U.S. and German leaders bicker over intelligence collection practices, they are ignoring the most costly casualty — a landmark U.S.-EU trade deal slated to boost the transatlantic economy out of its post-recession doldrums.

After two German officials were arrested on charges of spying for the United States, Germany ordered the CIA station chief in Berlin to leave the country. This story ripped open painful wounds from the NSA-spying scandal that had barely begun to scab over, when leaked documents revealed that the United States had spied on German citizens and tapped German Chancellor Angela Merkel's personal phone.


According to U.S. officials, this scandal is simply a crisis du jour spurred primarily by naivety and hypocrisy from an ally who spies right back on the United States. But to German officials, it's the latest example of overreaching U.S. intelligence practices that irrevocably damage the U.S.-German relationship and deeply undermine the sanctity of allies' trust — to the point where the German committee investigating the NSA has considered switching to typewriters.

In this politically charged climate, German and EU leaders may find a new political lightning rod for rising frustration toward the U.S. in the Transatlantic Trade and Investment Partnership (TTIP), an ambitious trade deal between the United States and the European Union slated to add $280 billion and 13 million jobs to the transatlantic economy. Germany is the EU's economic center of gravity, making it the United States' most important bilateral partner in the TTIP negotiations. German and EU politicians will have to sell TTIP to their people for it to pass. This will be much more difficult with citizens furious at the country on the other side of the negotiating table.

As one German official told The New York Times, the latest scandal "overshadows everything we do," including TTIP negotiations (complicated by the fact that the next round of TTIP negotiations started this week with the spy scandal still saturating headlines). Indeed, the chair of the European Parliament's Committee on Foreign Affairs, Elmar Brok, hinted in an interview after the Edward Snowden scandal first broke that TTIP could be leveraged against the United States: "the European Union is in charge of all the trade negotiations, all the rules and regulations on data protection, on the new transatlantic marketplace agreement. ... I think the Americans should see that it is in their interests to find a solution to this question."

While few European officials have explicitly stated that the spy scandal will slow TTIP talks, it will undoubtedly be the elephant in the negotiating room. How can the United States salvage TTIP's prospects before political pressures grind the trade negotiators' efforts to a halt?

First, American officials need to acknowledge the full scale of damage to U.S.-German relations. Right now, American officials appear to be more annoyed than concerned, neither comprehending how deeply the multiple spy scandals scarred the German public nor how it could hinder TTIP negotiations. White House Press Secretary Josh Earnest said Germany should understand what allies' "intelligence relationships and activities entail" and Rep. Mike Rogers (R-Mich.), chairman of the U.S. House Committee on Intelligence, accused Germany of throwing a "political temper tantrum."

Intelligence, especially surveillance, is a deeply personal and contentious subject for the German people, inextricably rooted in the country's painful and infamous past. That makes this scandal disastrous for U.S.-German relations, but this fact falls on deaf ears in the White House.

Second, the U.S. government must demonstrate that it will exert additional oversight on overly broad intelligence collection practices. Even if the government didn't substantially alter U.S. intelligence policy (something even Angela Merkel conceded is tough), it would demonstrate to allies that at least publicly elected bodies were sufficiently "watching the watchmen."

Lastly, the United States should include language in TTIP that explicitly signals a commitment to agreeable civil liberty protection for both American and EU citizens, while still effectively protecting national security interests. European officials can brandish this as a victory, and the United States can link TTIP's success with policies on curbing broad surveillance it should have implemented in the first place.

The NSA spy scandal unleashed a political firestorm in Europe, and this most recent scandal further fanned the flames. American policymakers must realize that this will not simply blow over with the right mixture of time, a few quotes about being "great friends," or a nice photo-op. This is a disastrous turning point for U.S.-German relations, and potentially TTIP, but few Americans seem to notice. The United States has shown it's more than capable of eavesdropping on allies, but now it's time to listen to them.

Gramer staffs the Atlantic Council's Transatlantic Security Initiative. He tweets @RobbieGramer. All views expressed are his own.