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Punitive Duties: The Struggles of the Great

Punitive Duties: The Struggles of the Great

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                                                                Page 1 – The Struggles of the Great


Page 2 – The future has become even less predictable

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        "Trump's tariffs threaten Germany", "German industry calls for help",
      "German researchers warn against trade war": The headlines came as no surprise.
      Even before taking office, US President Donald Trump had the trading partners of the
      United States threatened to make imports more expensive to the domestic economy
      protect. Far before taking office, to be precise: Already in 1990 had the
      Real estate entrepreneur Trump in an interview with the
        playboy
        for a tough attitude
      –
        "a toughness of attitude"
        – advertised: He would, he said at that time, everyone
      Mercedes-Benz rolling through the country, and all Japanese products with a tax
      prove: "And then we would have wonderful allies again."
      
                
                
            28 years later he is serious. Besides China, the EU is on the list of opponents. What exactly Trump intends to do, what he's going to do with it, and whether he's actually ready to wage a worldwide trade war is all unclear. That would not only be bad news for the large corporations, but also for the medium-sized companies in the export nation of Germany. Nevertheless, so far no panic broke out, on the contrary.
            In August and September, the Kreditanstalt für Wiederaufbau (KfW) and the Ifo Institute found a significantly better mood than in the past months: their SME barometer picked up again significantly. "I do not see any panic among our customers," says Maximilian Karagötz, whose company Alton helps German companies enter the US market. Similar reports are made by the Association of Family Businesses and the Chambers of Commerce and Industry. How can that be?


This article is from TIME no. 42/2018. Here you can read the entire issue.

Review: In March of this year, the time of the announcements was over. The US imposed punitive tariffs on steel and aluminum imports. There was a delay for goods from the EU, but since June, 25 percent apply to steel and 10 percent to aluminum.
            And Trump added that his administration also wants to raise tariffs on European cars, 20 or even 25 percent. However, these plans and other plans have been put on hold between Trump and EU Commission President Jean-Claude Juncker at the end of July. Now is being negotiated again. The ceasefire is also likely to have been counteracted by EU countervailing duties on products such as whiskey, peanut butter and Harleys – carefully selected for their manufacturing facilities in those US states where Trump has many followers.
                
                
            So far, the duties imposed only affect a small group of German companies. "Steel and aluminum exports to the US account for only a tiny fraction of total gross value added," says Philipp Scheuermeyer, an economist specializing in macroeconomics and the global economy at the Kreditanstalt für Wiederaufbau (KfW), "and a large part of this is done by large companies."
            
        The duties of others


The duties of others

USA against China:
                                                                    In June, the Trump Administration imposed tariffs on Chinese goods worth $ 50 billion. Since September, higher tariff barriers have been applied and the volume is now around € 200 billion. China responded with tariffs on soybeans, dairy, beef and pork.
                                                                    EU against US and China:
                                                                    The EU also levies duties against the US, for example on pick-up cars, negotiated in the World Trade Organization. The tariffs on Chinese steel justified the EU with the fact that Beijing massively subsidizes its production. Here she shares Trump's attitude.
                                    
            
    
One of the affected SMEs is Sönke Winterhager, Chairman of the Supervisory Board of BGH Edelstahlwerk Freital. The BGH Group also supplies forged and rolled steel to the USA – about ten percent of its exports. But even Winterhager estimates the threat as "very low". So far, the BGH could pass the higher costs completely to its US customers: "Because we produce high-quality steel, either the Americans can not do it themselves, or the few who can do it, have already used their capacity." The problem he suspects elsewhere: companies that produce less high-quality steel products could not easily transfer the tariffs on their customers, in this area, the US producers are cheaper. And if there is less left over for US and Turkish steel cookers in the US, they try to squeeze their products into other markets, such as the EU. Winterhager's fear: if the markets were oversaturated for simpler steels, European companies would resort to producing higher quality steel too: more competition for him. So far, however, the concern has not come true. "Let's see how long the spook lasts," he says.

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