The German Industry and Trade Association (DIHK) has warned of potential damage to the German economy due to the planned tariffs on Mexican and Canadian goods by US President Donald Trump. “The tariffs on goods from Canada and Mexico would also hit German companies” said DIHK’s Chief Executive Helena Melnikov to the Funke Media Group’s newspapers (Wednesday editions).
“Many of them are deeply integrated into the supply chains of North America. The additional costs could primarily drive up production prices in the automotive and supplier industry” Melnikov said.
Trump had announced plans to impose tariffs on goods from Canada and Mexico, with a start date of February 1, after his inauguration. During the campaign, Trump had also announced tariffs of at least 10% on all foreign products and an increase in existing tariffs on Chinese imports.
Melnikov called for the EU to engage in a dialogue with the US to identify common interests that would benefit companies on both sides of the Atlantic. “This includes solutions for technical standards and resilient supply chains. When negotiating trade barriers, flexibility and creativity are always required” the DIHK chief added.
Melnikov also foresaw consequences for Europe due to Trump’s announcement not to implement the OECD’s globally agreed-upon tax regulations, the Global Tax Deal. Additionally, Trump plans to introduce protectionist measures if US companies are taxed additionaly abroad on this basis.
“This weakens international cooperation on taxation and could lead to further distortions in the global competition, to the detriment of European companies” Melnikov said. Europe must now act in unison, she emphasized.
“The expansion of partnerships with emerging markets like India and Indonesia, as well as the swift ratification of the EU-Mercosur agreement, are decisive steps to open up new markets and strengthen the resilience of the European economy” Melnikov said. At the same time, a stable and fair access to the US market remains essential for the global competitiveness of European companies.