Synopsis
Germany reacts with criticism and concern regarding US President Trump's recent tariff decisions impacting Canada, Mexico, and China. The tariffs could lead to increased consumer costs and inflation in the United States, raising alarms among German officials and businesses.Key Takeaways
- Trump's Tariff Impact on Canada, Mexico, and China generates widespread concern in Germany.
- Chancellor Olaf Scholz emphasizes the need to avoid trade divisions.
- German businesses brace for economic repercussions, especially in the automotive sector.
- Potential price increases may burden American consumers.
- Warnings from industry leaders about the long-term consequences of tariffs.
Berlin, Feb 3 (NationPress) The tariff decisions made by US President Donald Trump regarding Canada, Mexico, and China have generated significant criticism and concern in Germany.
On Saturday, Trump announced a 25 percent tariff on imports from Mexico and Canada, along with a 10 percent tariff on goods from China. He also hinted that the European Union (EU) might be targeted next due to its ongoing trade surplus with the US.
German Chancellor Olaf Scholz reaffirmed Germany's dedication to economic relations with the US, emphasizing that the primary goal should be not to create divisions with numerous tariff barriers.
Friedrich Merz, Chairman of the German Christian Democratic Union, expressed that tariffs have never effectively resolved trade disputes, cautioning that increased import costs will lead to inflation and negatively affect American consumers, as reported by Xinhua news agency.
Dirk Jandura, president of the Federation of German Wholesale, Foreign Trade and Services (BGA), characterized the tariffs as a clear warning to the EU and Ursula von der Leyen, stressing the need for Germany and the EU to take action.
Jandura warned that Trump's strategy would come with steep costs for Americans, stating, “The losers are always end consumers, who will experience price hikes at the checkout.”
German businesses are also preparing for the repercussions, particularly as many supply the US market from Mexico, especially in the automotive sector.
As reported by the German newspaper Handelsblatt, Mexico has long been Germany's most significant investment destination in Latin America, with investments surpassing 45 billion US dollars since the 2000s.
The Volkswagen Group, which runs one of its largest vehicle factories in Mexico, manufactures nearly 80 percent of its North American vehicles there and in Canada. A spokesperson from Volkswagen raised alarms about the potential economic repercussions of the tariffs, warning of adverse effects on American consumers and the global automotive industry.
According to credit rating agency S&P, Canada and Mexico produce around 5.3 million passenger cars annually, with about 70 percent of those destined for the US market.
Importers are expected to pass on most, if not all, of the price increases to consumers, with S&P cautioning that these added costs will further stress affordability in the US auto market.
