The customs compromise with the USA is not a relief for the German economy. Nevertheless, he was longed for by many decision -makers. New dangers lurk in the EU’s billions.
Perhaps in view of the transatlantic balance of power, it was really no longer possible for the EU. But even if it was so: every result of real policy leaves winners and losers.
In the German key industry, the auto industry, the balance of power is reflected. With US import duties of 15 percent, the last arbitrary 27.5 percent are off the table, but the ideal of fair trade relationships is far away for EU-counter tariffs of 2.5 percent.
Finally more Planning security
In their response, Germany’s carmaker also reveals what is immensely important for industry as a whole: A month -long phase of uncertainty now follows facts that can be better planned.
It was “fundamentally good” that “a further escalation of the trading dispute” was averted, explained the President of the Association of the Automotive Industry (VDA), Hildegard Müller. However, it was also clear that the US tariffs cost the industry “billions of” annually “and that they will put a strain on” in the middle of the transformation “.
“Depreciation” for car manufacturers?
Of course, experts also warn of further faults from Washington, who could put a strain on the upcoming detailed negotiations. However, carmakers may hope for a kind of offsetting, said auto expert Ferdinand Dudenhöffer: If a German car manufacturer produces and exports to Europe in the United States, duty-free exports from Germany to the USA could be approved in return.
“If no clearing take place, we assume a medium-term export of the auto industry of up to ten percent from Germany to the USA. In numbers up to 70,000 jobs,” said Dudenhöffer.
Billion damage for German economy
For the German pharmaceutical manufacturers, the US tariffs of 15 percent be allocated completely new times. The Association of Researching Pharmaceutical Companies (VFA) spoke of a serious step backwards, which broke on the decades of duty-free pharmaceutical trade. “This degree now seals billions in loads for the pharmaceutical location of Germany,” said VFA President Han Steutel. “These are not good news for jobs and for investments.”
However, the previous result is particularly bitter for steel and aluminum producers, for whose US imports Washington continues to require 50 percent inch. The trade deal has changed nothing in the “catastrophic situation” of the industry, according to the Steel business association. A spokesman for the Federal Government reported further needs of negotiations here. The European armaments industry is also on the side of the losers in view of the high investment commitments of the Europeans.
Germany is particularly affected by the new customs regime as an exporting nation, which generates over 42 percent of its income with exports. The local economy threatens a billion dollar damage. According to the Kiel Institute for the World Economy (IFW), the new tariffs are likely to reduce the German gross domestic product (GDP) by 0.15 percent within a year, reports the Handelsblatt. That would be a loss of around 6.5 billion euros.
How should the energy purchase work?
Even if many details have to be clarified in the customs sets- the EU’s purchase and investment commitments are particularly difficult. Until the end of Trump’s term, i.e. in the next three years, the EU should spend $ 750 billion for US energy and invest an additional $ 600 billion in the USA.
Apart from the fact that the most decisions have to be made by private companies – energy imports from the United States for $ 250 billion a year do not seem to be feasible. Last year, the EU from the USA introduced energy (oil, oil products, gas and coal) worth almost 77 billion euros – with a total value of the energy imports of around 376 billion euros.
This means that the Commission would have to make European companies to buy the triple amount of energy from US companies-at the expense of other providers and regardless of prices, Anne-Sophie Corbeau from the Center on Global Energy Policy at Columbia University. It is not even certain whether US exporters would offer the corresponding quantities in Europe at all.
A more fossil fuels would also collide with the EU climate protection goals: “If you particularly import more LNG and oil from the USA, this is contrary to the goals of expanding renewable energies,” said economist Samina Sultan from IW Cologne.
In the event that the European countries do not meet their investment commitments, the United States was open to increase tariffs in the future, it was already said from Washington. A real line sounds different.
With information from Christian Bahrs, NDR
