Commercial compromise with Trump: Industry is suffering from US tariffs: “Business before the end”

Donald Trump’s worst threats seem to be averted, but many industrial companies see the customs compromise between the EU and the USA as an excessive burden in Europe. In further discussions with the Trump government, you want a hard gait of the EU Commission, as a DIHK survey of around 3,500 companies shows, mostly from industry.

In a letter to EU Commission President Ursula von der Leyen, the mechanical engineering association VDMA demands renegotiations. Because of the tariffs, the US business of many companies is out of the end. The chairman of the conservative European People’s Party (EPP), Manfred Weber, campaigned for more trade beyond the United States.

“Zolldeal has already lost its value”

Mechanical engineering is increasingly suffering from import duties to the USA, criticizes the VDMA. Although a customs rate of 15 percent is planned for most EU products in the deal with the USA, the government under US President Trump is raising the much higher steel and aluminum tariffs of 50 percent for more and more products. The VDMA already estimates that 30 percent of US machine imports from the EU are subjected to an inch of 50 percent on the metal content of the product. These include engines, pumps, industrial robots as well as land and construction machinery.

The customs deal has already lost its value for mechanical and plant engineering, said VDMA foreign economic expert Oliver Richtberg. “The flat-rate 15 percent control is actually undermined by the tariffs to steel and aluminum products.”

DIHK: Despite customs cleaning, companies suffer

The trouble is not only big in mechanical engineering. As a survey by the German Chamber of Commerce and Industry (DIHK) showed, 55 percent consider the agreement as an excessive burden on the European economy. Among companies with US business, 54 percent indicated less trade as a consequence. “The new, aiming for consortation of the United States is likely to backfire,” said DIHK foreign manager Volker Treier from the German Press Agency.

Trump and von der Leyen announced a compromise in the customs dispute at the end of July. Among other things, a US of 15 percent should apply to most European products. Customs duties on US industrial goods, on the other hand, are to be completely abolished.

The EU wants to accommodate the United States far so that it can retrospectively reduce the tariffs of 27.5 percent to auto imports from the EU to 15 percent in retrospect. Trump, on the other hand, recently raised new demands: he wants to get the EU not to apply its strict digital laws against American companies.

In the DIHK survey, 17 percent of the companies with US business stated that they are investing there. Less investments in the United States named nine percent. “The US customers will primarily pay the raised import duties themselves,” said Treier. According to the study, 31 percent of companies with America business want to change their handling of US customs costs. Of these, 62 percent plan to pass them on to customers.

“EU should not shy away from countermeasures”

The DIHK emphasized that the intended reduction of the US tariffs in the car and metal area had to come quickly. A mechanism is also necessary to exclude future US tariff increases. “In an emergency, the EU should not shy away from countermeasures and negotiate here robustly,” said Treier.

The EVP chairman Weber campaigned for a stronger focus on other markets. “The best answer to Donald Trump’s protectionism is now, with the global partners who want to continue practicing free trade with us, to come into business,” said the CSU politician in Berlin. The EU trade agreement with the South American Mercosur countries should be completed quickly.

Weber called the compromise with the United States a “painful deal”, which had prevented a trade war. He also called for the power of his own EU internal market to be more released. For example, for services and energy there are still nationally sealed markets.