The customs deal between the EU and the USA continues to beat waves. Not all details are still negotiated and announced, but some effects are already foreseeable. What are the consequences for the German economy – and consumers?
Will US cars become cheaper in the future? Not only this question arises after the customs deal of the European Union (EU) with the United States from the weekend. For most EU imports to the USA, a basic customs set of 15 percent was agreed. All of this should have economic effects in a wide variety of areas.
Could certain products become more expensive?
“The most important news for consumers in Germany is that this deal will initially have no European counter -duties on goods from the United States,” Andreas Baur from the IFO Center for Foreign Affairs in Munich told the dpa news agency. Such countermeasures would lead to a price increase among the US products concerned. But that is not the case.
It is still unclear to what extent the EU actually contains the EU’s customs for US products. In a paper of the white house for customs cleaning, it says that the EU will completely abolish all tariffs to US industrial goods. “That would let the price of US products in Germany sink in the tendency,” said Baur. However, the tariffs for US industrial goods are already relatively low on average.
What does this mean for car buyers?
Car buyers in Germany could benefit from customs cleaning between the EU and the USA, according to experts. SUVs from German manufacturers such as Mercedes or BMW that produce and export to the EU in the United States may be cheaper by the new deal, said Jürgen Matthes from the Institute of German Economy (IW) in Cologne. In order for US cars to become cheaper, “the price reductions would also have to be passed on”.
The Federal Association of Wholesale, Foreign Trade, Services (BGA) was expressed with regard to possible price developments. “The expectations of falling prices from customs cleaning should not be exaggerated,” said BGA President Dirk Jandura. Import dumplings are now eliminated on certain products such as cars – but it is questionable whether this is important to the customer.
How much does the German economy get the deal?
According to the economist Matthes, the US tariffs on German imports are a “strong damper” for the economy in Germany. In particular, they would have negative consequences for companies that rely on the United States – for example in the pharmaceutical industry, the auto industry and in mechanical engineering. The United States is the most important export partner in Germany. Around a quarter of exports even go there in the pharmaceutical sector.
“A deal may easily reduce uncertainty for companies – but US tariffs of 15 percent damage to the German economy,” said the head of the IFO Center for Foreign Affairs in Munich, Lisandra Flach. This is likely to have a negative effect of minus 0.2 percent on gross domestic product.
How do the tariffs influence German exports?
The agreement is expected to ensure that added value in German industry is falling by around 1.5 percent, according to Flach. The sale of German goods to the USA in particular could fall permanently – almost 16 percent. Some goods would be redirected to other countries, but the overall German exports are likely to decrease slightly. According to the institute, the numbers are based on a simulation that was calculated after the deal became known.
“This somewhat lazy compromise will slow down the relaxation, that is, the way out of the recession,” estimated BGA President Jandura. The supply chains are likely to adapt to the new circumstances and, if necessary, move to other regions. But that time.
