Many German political analysts believe that Merkel's predecessor Gerhard Schroeder went too far in irritating Washington by his strong opposition to the Iraq War, which consequently saw Germany sidelined by its powerful transatlantic ally.

And the improved relations with Washington did give Merkel more leeway to raise Germany's profile on the world stage.

Merkel has won applause at home for bringing Bush on board to sign up to her climate change program at last year's Group of Eight (G8) summit in Heiligendamm, which was held under the German presidency.

And the Transatlantic Economic Council initiated by Merkel also came into life last year with the aim of lowering non-tariff trade barriers by harmonizing varying norms and regulations on both sides of the Atlantic.

However, the progress does not mean that the transatlantic ties exist without problems. On climate change, which is high on Merkel's foreign policy agenda, Berlin is disappointed to see the Bush administration rolling back on the Heiligendamm commitment.

Transatlantic trade relations are also plagued by conflicts ranging from subsidies for Boeing and Airbus to US plans to scan all incoming cargo containers for radiation, which Merkel said could bring "significant damage" to transatlantic trade ties.

Washington meanwhile has also threatened to put the Transatlantic Economic Council on ice if the European Union does not lift its import ban on poultry treated with chlorinated water from the United States.

On the political front, Bush also saw his plan to offer Georgia and Ukraine the Membership Action Plan that triggers negotiations to join NATO blocked by Merkel, who fears that the move might irritate Russia, the main energy supplier of Germany.