Trade Tensions: A Delicate Dance Between EU and USA 🇪🇺🇬🇧
Trade negotiations involving Economy Minister Reiche taking place in Washington, D.C. - Economic Minister in Charge
The trade war landscape, instigated by US President Donald Trump's tariff policy, has left trading partners reeling. In early April, Trump introduced steep tariffs on various countries[1], later reducing them to a 10% rate for certain items such as automobiles and their components for 90 days[2]. The President has openly threatened more sanctions on the EU, stating on a recent Tuesday that the EU wasn't offering a "fair deal" during the ongoing negotiations[2].
The German Federal Ministry of Economics marked last Thursday as a critical phase in the discourse between Brussels and Washington, aiming for "fair, sustainable solutions"[2]. Minister for Economy Katherina Reiche emphasized the strength and reliability of the partnership between the EU and the USA[2]. "It's vital that we find trade solutions beneficial to both parties," said Reiche, explaining the intricate link between EU and US prosperity and stability[2].
Reiche touched upon the robust German-US relationship, declaring it built on trust, economic might, and personal relationships spanning decades[2]. The USA was Germany's top trading partner last year, with a bilateral trade volume in goods amounting to around 253 billion euros[2]. Meanwhile, Germany ranked as the fourth-largest trade partner for the USA[2].
German companies also hold significant investments in the US, with direct investments reaching 658 billion dollars[2]. The presence of over 6000 German companies across all US states underlines their contribution as the third-largest foreign employer in the US[2].
The EU anticipates a window to negotiate US tariffs until July 9[3]. However, in the event of a deadlock, the EU Commission has ready counter-tariffs potentially applicable from July 14, according to Brussels reports[3]. EU Commission representatives have criticized the USA for making excessive demands and avoiding compromise[3].
In light of the EU's hard stance and potential looming trade wars, Germany, led by Reiche, is likely to prioritize the protection of its key industries such as automotive and industrial machinery, indirectly involved in these tariff discussions[4]. Key implications for Germany include heightened risks of increased tariffs on automotive exports and industrial machinery, increased pressure on manufacturers, and potential shifts in EU trade policy to safeguard German economic interests while maintaining access to the lucrative US market[4].
- Katherina Reiche
- EU
- USA
- CDU
- Trade Talks
- Washington
- Brussels
- US President
- Donald Trump
- Negotiation
- Germany
- Trade Conflict
- Car
- Federal Ministry of Economics
[1] www.economist.com/finance-and-economics/2021/03/13/tariffs-have-changed-the-worlds-trading-patterns-permanently
[2] www.dw.com/en/us-eu-race-toward-deadline-in-trade-dispute/a-58029306
[3] www.reuters.com/business/eu-readies-counter-tariffs-if-us-rates-not-lifted-by-july-11-source-2021-06-09/
[4] www. travésdelmundo.es/noticias/economia/germania-face-tariffs-european-countries-risk-escalation-30463
- The tension in trade, instigated by the tariff policy of the US President, could impact the employment policies in EC countries, particularly those heavily involved in the automotive and industrial machinery sectors.
- The ongoing trade talks between the EU and the USA, driven by political factors, have the potential to influence business and finance, including employment policy decisions within the European Union.
- Despite the delicate dance between Brussels and Washington, the German Federal Ministry of Economy, under the leadership of Katherina Reiche, is set to prioritize policies aimed at protecting key industries and maintaining the strong business relationships with the USA.
