The fact that US President Trump increases the tariff so much will have a price. What do consumers have to expect? How big could the damage be for Europe – and for the USA itself?
American tariffs generally have a few percentage points under European tariffs. This is shown by calculations by the employer -based institute of the German economy (IW). So not only the European export industry has so far been easy in the United States; Overall, tariffs in the USA are lower than in most other countries.
That should end. Despite a free trade agreement, the US government has occupied all imports from Canada and Mexico with a 25 percent importing duty since Tuesday. This has been announced for the European Union for early April.
It’s about Bourbon and Root Beer
Seven years ago, the EU reacted to a customs shock under the first Trump government. They met regions in which Trump’s Republican Party was strong. And they concerned goods that were easy to replace in Europe with local products: whiskey, jeans and motorcycles. The Americans rowed back. This had little effect for consumers.
There should also be hardly any direct consequences for private consumption at the moment. If the EU should react again with counter -tariffs, it is advisable to buy the new Harley Davidson quickly or switch to BMW or Honda in spring. European shops of American fashion brands are supplied from Asia anyway. The enjoyment of Root Beer, on the other hand, could become more expensive.
Which Economy especially suffer
Customs brakes the trade between highly industrialized countries and leadership consumption to become cheaper domestic offers. It becomes difficult for developing and emerging countries who have only a small domestic offer and have to finance their necessary imports through exports. But the effects are also noticeable in industrialized countries – not so much in private consumption, but for the production and employment of individual companies, industries and thus for the entire economy.
The Kiel Institute for the global economy assumes that the gross domestic product in the EU would decrease by around half a percent if the American tariffs came. With growth of only 0.9 percent last year, this is a lot.
Why American tariffs are low
The current low American customs level has been built over for decades. With low tariffs, the United States has opened its country to world trade and thus to the world. And they have accused their own economy to reach world level.
At the same time, economically weak countries were made possible to export to America and thus work out out of poverty. “The United States was ready as a hegemonic power with a strong economy and as a great advocate of free trade to put its tariffs lower than many partner countries” summarizes the IW.
The American Current account
According to the American statistics authority, Bea goods worth $ 3,100 billion in 2023 and exported only for $ 2,000 billion. This shows that the world sells a lot in America and buys less there. It is about highly specialized industrial products such as cars, consumer goods and machines. According to Beads, the EU delivered to the United States for $ 580 billion in 2023, but only took goods worth 380 billion.
Customs work on the goods traffic. The current account between countries is also determined by services and direct payments, such as investments, insurance payments, transfers from foreigners and development aid.
These factors do not compensate for the imbalance in goods traffic; But they relativize them. Because of the business of American internet giant, according to the statistics authority Eurostat, 110 billion euros more from the EU were transferred to America than came back. The business of dominant American investment banks is also shoveling billions into the United States every year.
What is in Europe?
US President Trump has announced high tariffs for the goods business with Europe; However, it is unclear whether this is actually implemented. It could also be a tactical maneuver to scare negotiating partners.
The Institute of German Economy has calculated that a general high customs of Europe could damage a three -digit billion -dollar amount annually. However, if in the end it only comes out that low US tariffs are raised to the not so low European level, the EU would get away with a blue eye, writes the IW.
Blessing and curse of tariffs
If domestic industries are comparatively weak, they can be protected from strong foreign competition with tariffs – ideally until these industries have developed the connection to the world level. Often, however, interest in modernization is often suffering when economies areolated permanently.
The high customs level of India is an example of both: millions of poorly trained workers remain in wages and bread. At the same time, numerous industries in India are lagging behind. They produce ineffective and expensive, which is at the expense of all prosperity in the country.
Customs control of economic developments. Small platform trucks (“Pick-Up Trucks”) from abroad have always declied 25 percent in the United States. This high customs protects the domestic economy. Ford, General Motors and Chrysler (Stellantis) earn a lot of money with their often simple and very popular small loads in America. VW pulled the consequence and builds pick-ups directly in the USA.
The fear of the auto industry
The German auto industry trembles the most from the customs threat. Mercedes, BMW, VW and Co. have been producing in the USA for a long time, but the trade balance for cars between Germany and the USA is still extremely wrong. According to the Federal Statistical Office, “land vehicles” worth 34 billion euros were shipped to America from Germany last year and introduced for eight billion euros.
Because of the importance of the port of Rotterdam, the images and export of cars can be added to the Netherlands. This does not lead to exact numbers, but to a plausible approximation – with the same result: the export is a good four times as large as the import. North America is the largest market for Porsche. More than every fourth Porsche from German and Slovak factories runs across the Atlantic.
Industrialist are intertwined
Porsche and Harley-Davidson are special cases. Complicated to the end of the heart and therefore expensive goods are only made in a country and sold all over the world from there. For decades, industrial countries have built worldwide production, international suppliers and close connections across national borders. Half -finished goods are pushed from one factory to the next. These relationships are effective and cheap and make it possible to clink in populated countries.
A Bundesbank data collection shows how much tariffs can hinder this. Of the goods worth 160 billion euros that were exported from Germany to the USA in 2023, a fifth goes to the account of cross -border traffic, in which the same owner stood in Germany and America. If there were 25 percent inches, the costs for these international producers rose by seven billion euros a year. If the EU reacts with the same counter -tariffs, it would be even more drastic: a third without changing the property ran from 95 billion euros in imports to Germany from the USA. At 25 percent counter -customs, this would increase the costs by another eight billion euros.
The United States is most affected by these effects worldwide. The International Monetary Fund publishes an “Index for Innovation and Economic Integration”. Israel is at the top, followed by four European countries (including Germany), three Asian and the United States. Because the United States is the largest among the most networked economies, it can hit it the most when the network gets cracks.
