The special tariffs on cars considered by US President Donald Trump could hit the German auto companies sensitive to the Ifo Institute in Munich. If the US permanently increases import tariffs by 25 percent, German car exports to the USA could almost halve in the long term, according to calculations by the institute.
"These duties would reduce the total car exports from Germany by 7.7 percent, which would correspond to a value of 18.4 billion euros," says ifo expert Gabriel Felbermayr. Exports from other sectors and to other countries should, however, slightly mitigate the overall economic loss, with the result that total German exports would fall by 11.6 billion euros. Earlier, a study commissioned by the Association of the Bavarian Economy had already predicted tariff costs of three to five billion euros.
Meanwhile, in the trade dispute with the US, a decision about possible tariffs is getting closer. On Sunday, the deadline for a decision by the US Department of Commerce on whether imports of cars and parts will affect the national security of the country ends. If this is the case, Trump could be within 90 days of whether he wants to impose special duties. Recently, special duties of 25 percent were brought into the conversation. As a result, Trump wants to reduce the US trade deficit and create jobs in the US.
How is the EU responding to possible car taxes?
When exactly the decision becomes public is open - next Monday is a holiday in the US. So far, the ministry has not commented on the decision. However, EU Trade Commissioner Cecilia Malmström has recently expressed her confidence that the US will forego special duties on European cars. The auto industry held after a meeting with Trump in December, car tariffs for avoidable, VW boss Herbert Diess had a close partnership with US rival Ford in prospect.
A spokesman for the European Commission said AFP, should the US still "act in any way", the European Union will "respond". Details he did not name any. Brussels has already prepared a list of US goods worth € 20 billion, which would be used in the case of car tolls with high countervailing duties.
Already on the already imposed US tariffs on steel and aluminum, the EU had reacted with barriers to US products - such as whiskey. The whiskey exports from the US to the EU have recently fallen significantly, according to the US industry association The Distilled Spirits Council. However, this is about comparatively small sums.
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If Trump impose car taxes, this should reduce the value added of the important German industry by five percent, according to economist Felbermayr. Within the EU, about 60 percent of any damage caused by this would be to the Federal Republic. Value added in the US auto industry, on the other hand, could rise.
The German auto industry warns against foreclosure and refers to the importance of German carmakers and suppliers for the US labor market. "By 2018, around 118,000 employees were directly employed in their factories, around 8,000 more than a year earlier," says the German Association of the Automotive Industry (VDA). "While we produced around 750,000 vehicles at German US plants in 2018, only 470,000 new cars were exported from Germany to the US."
If there were no backlash from other countries, the US could actually benefit from special tariffs in the long term, says Felbermayr. "Porsche, Audi, BMW, Mercedes and Co. would increasingly produce in the US and thus circumvent the duties." If you continue to export to the US, you must lower prices. In addition, the US would collect billions of customs revenue. Countervailing duties, however, ruined everything.