Agreement between EU and USA
Mechanical engineers consider customs agreement to be โworthlessโ
The mechanical engineering association VDMA is urging the European Union to renegotiate the customs dispute with the USA. The background is additional tariffs on the steel and aluminum content of the exported machines.
The export-oriented mechanical engineering companies have urgently called on the EU to renegotiate the customs agreement with the USA. โIf the American customs lists are expanded in December, German and European mechanical and plant engineering will face new hardship,โ the Association of German Mechanical and Plant Engineering (VDMA) announced today.
According to our own calculations, more than every second machine exported will then be affected by the high steel and aluminum tariffs. The VDMA further explained that the customs deal between the EU and the USA is โworthlessโ for German and European mechanical engineering.
Supply chain disruption feared
In addition to the basic tariff of 15 percent, additional import duties already have to be paid for around 40 percent of the machines and systems according to a complicated procedure, it said. After a round of expansion in December, this practice is expected to be applied to around 200 more products in the industry. Then 50 percent duty would have to be paid on their steel and aluminum content. This is about the classification in the so-called โSection 232โ list of sectoral tariffs.
As a result, according to VDMA calculations, around 56 percent of German machinery exports would be affected by the high steel and aluminum tariffs, which affects almost all branches of mechanical engineering, warns the association. If the value of steel and aluminum or its origin is incorrectly reported, there is even a risk of a punitive tariff of 200 percent.
โIt is to be feared that the USA will continue this foul play,โ said VDMA President Bertram Kawlath. That is why the EU must not let up. โWe urgently need renegotiations on this customs deal, which brings anything but predictability and stability to our industry.โ Ultimately, there is a risk of export stops and delays and thus a disruption of the supply chains, according to the industry representative.
Damage for them too US defense production?
According to the announcement, the VDMA has submitted its criticism not only in Brussels to EU Commission President Ursula von der Leyen and Trade Commissioner Maroลก ล efฤoviฤ, among others. Kawlath also wrote a letter to the US Department of Commerce, it said. He warned the USA of negative consequences for its arms production, which relies on machines manufactured in Europe.
The association therefore calls on the US authorities not to subject any further products to customs duties and documentation requirements under Section 232. “If they do, European products should be exempt to avoid harm to American industry, protect U.S. manufacturing jobs and strengthen critical supply chains critical to national security.”
With more than a million employees, German mechanical engineers are one of the most important industries in the German economy. Along with China, the USA is one of the most important foreign markets.
