World trade
Economists: Trump’s tariffs meet the USA more than EU
Europe has to react to Trump’s tariffs with more free trade agreements, advisable Franco-German economists. At the same time, their calculations show that tariffs will probably hit the United States more than the EU.
Economists from Germany and France are calling for the EU to advance free trade agreements with other economic areas in the customs dispute with the USA. The EU must “take on a leadership role in defending the global trade regulations,” write the experts in a statement by the French Consil d’Aleysis Économique and the Franco-German Council of Economic Expert.
The more open the global economy despite the US tariffs, the lower the cost of tariffs for the European economies. “The EU has to support European companies whose access to the US markets is limited to opening up new export markets and finding new trading partners,” said Monika Schnitzer, co-chair of the Franco-German Council of Economic experts.
Calculation: Trump’s tariffs meet the USA stronger than EU
The Franco-German economists think it is very likely that the US base custom is permanently invested. The economic consequences are more difficult for the United States than for the EU, according to the analysis. According to calculations, the estimated decline in real production for the United States is between 1.0 and 1.63 percent. In contrast, the consequences of this customs increase to the EU countries with around 0.15 percent of the gross domestic product should be significantly lower.
In a second examined scenario for the higher tariffs announced by Trump on the “Day of Liberation” in April, the decline in real production is stronger: then it is between 0.22 and 0.33 percent in the EU.
The EU should use the suspension of parts of the US tariffs for 90 days to sign the trade agreement with the Latin American Mercosur countries and to advance trade agreements with other countries, the economists write.
“At the same time, she has to prepare decisive countermeasures in the event that the US administration puts the threatened and currently exposed reciprocal tariffs back into force,” emphasized Schnitzer, who is chaired by the Council of Experts to assess the overall economic development (“economy”). The economists name an access to the EU market, regulatory measures for digital services and counter-duties to US products.
The economist Gabriel Felbermayr recently demanded more free trade agreements. Not only the Mercosur Agreement is practically ready for signature, but also negotiations with India and Australia have recently advanced, said the former head of the IFW Kiel.
dpa
Source: Stern
