By less than 3% will reduce its exports Germany toward USA If the US President, Donald Trump, is currently imposing (2.4.25) mutual duties on the EU.
The IFO Institute has simulated these “mutual” duties, that is, the case where the US is increasing tariffs on products by the amount imposed by their commercial partners on corresponding US products. If the EU (along with Germany) do not receive countermeasures, German exports will be reduced by 2.4%. “Probably, more than half of German exports to the US are affected,” says IFO expert Lisandra Flach.
“However, the impact of mutual duties in Germany would be significantly lower than a flat -rate US duty of 20%,” Flach says. This is due to the fact that the duties gap between the US and the EU is relatively small in 0.5 percentage points. With a flat 60% US duties in China and 20% to the rest of the world (including the EU), German exports to the US will be reduced by about 15%, according to previous simulations by the IFO Institute.
Regardless of the financial impact, Flach considers the new tariff policy of the US President extremely problematic: “The planned increase in duties marks a turning point and is a frontal attack on the world -based economic class. Trump thus undermines almost 80 years.”
If the EU is able to equally reduce mutual duties on both sides through negotiations, this would have positive effects, according to simulations. “If the EU negotiates fully mutual duties with the US and Trump is willing to reduce duties accordingly, the German added value will increase,” Flach says. “Our findings emphasize the important role of negotiations in preventing the negative impacts of a trade war.”