The German engineering sector is voicing serious concerns about the potential impact of proposed US tariffs on its exports, with industry leaders warning that a 30% tariff rate could threaten the viability of numerous companies. Bertram Kawlath, President of the German Engineering Federation (VDMA), told Politico magazine that while some businesses might weather a 10% tariff, a 30% rate would present a significantly greater challenge.
The announcement by US President Donald Trump to impose a base tariff rate of 30% on goods from the EU has prompted the stark warning. Kawlath argued that this policy could paradoxically undermine US industrial goals. He pointed out that many products manufactured by VDMA member companies are not currently produced within the United States, making imports essential to bolstering American industry – a key aim of Trump’s stated reindustrialization strategy. The new tariffs, he suggested, would actively hinder this process.
In response to the US trade stance, Kawlath is advocating for a strengthened focus on European collaboration and market integration. He emphasized the need to deepen the European single market, citing limitations on the scaling capabilities of German businesses, particularly disruptive start-ups, due to the absence of a fully functional capital markets union. He underscored the importance of directing investment where it is needed, regardless of the specific country within Europe.
Kawlath described a palpable sense of frustration amongst member companies, stemming from both emotional and practical concerns. He acknowledged that the EU has, in his view, become overly burdened by regulations, but noted that both the EU and the new German government appear to recognize this issue.