Trump plans
IFO: Mutual tariffs do less than flat rate
The economic researchers simulated the consequences of the two most important scenarios. The difference is big because a crucial gap is small. And there is even potential for upswing.
If US President Donald Trump announces mutual tariffs in the evening, that would be the lesser evil for the German economy, according to calculations by the IFO Institute. Over half of all German exports to the United States could be affected, as trading expert Lisandra Flach says. But the effects would be comparatively low.
Without countermeasures by the EU, the IFO expert expects German exports to the United States by 2.4 percent, with retaliation by 3 percent. Both would be much less than with possible flat -rate tariffs of 20 percent, which should also be in the room.
Earlier simulations of the IFO, from 60 percent to goods from China and 20 percent on goods from the rest of the world, including the EU, resulted in a decline in German exports to the United States by around 15 percent.
The fact that the consequences of the mutual tariffs would be so much lower justifies Flach with the relatively small gap between the tariffs that the USA and the EU raise each other. On average, it is only 0.5 percentage points and is therefore much lower than with other US trading partners.
However, according to the IFO calculations, the mutual tariffs would hit the German auto industry particularly hard, followed by clothing and textiles.
There is also a positive variant
However, the Munich economic researchers have also calculated a possible positive scenario: in the event that the United States, where they collect higher tariffs than the EU. Then that would reduce German exports, but the value creation in Germany would increase.
And in the event that the EU and the USA agree to compensate for the tariffs by reducing them to the lower level, the model sees both an increase in German exports and value creation in the country. However, Flach writes itself that the likelihood that the United States will reduce tariffs will appear low.
“Our results underline the important role of negotiations to avert the adverse effects of a trade war,” emphasizes Flach. Basically, she sees Trump’s new customs policy as a “frontal attack on the regular -based global economic order”.
dpa
Source: Stern
