EU between fronts: US and China head for trade war

Thursday, July 5, 2018

US President Trump seeks confrontation. With punitive tariffs against China Friday begins a worrying escalation. The People's Republic will "fight". What dangers are threatening Germans and Europeans?

The United States and China remain on a confrontational path in the trade dispute. In retaliation for the entry into force of the US $ 34 billion special US tariff cuts on imports from China this Friday, Beijing will adopt countermeasures of a similar scale. indicated Customs. The escalation between the two largest economies is being watched with concern as the global economy could be affected. "The United States has provoked this trade war," Chinese Trade Ministry spokesman Gao Feng told reporters in Beijing. His country would not bow to "threats and blackmail". "China will be forced to retaliate." The country will defend its fundamental interests. In an attempt to counter the incalculable consequences of the trade conflict on the stock and money markets, the Chinese authorities have already drafted emergency plans.

US tariffs come into effect at midnight Washington time (Friday 6:00 am CEST). After this first round, another escalation threatens, like US President Donald Trump in mid-July, a 25% special fee to decide other Chinese goods worth $ 16 billion that could enter into force at the beginning of August. He justified the tariffs by theft of technology

Warning of a weaker economic growth

In response to the reprisals of China, Trump threatens but also with 10% customs duties on d & # 39; other Chinese imports of $ 200 billion. Overall, half of all exports from China to the United States would be affected. Experts warn that in the event of a large-scale trade war, economic growth in the United States, China and the world is declining.

Trump campaigns against the US foreign trade deficit on several fronts. In addition to China, the focus was mainly on the European Union. The EU threatens Trump, among others, with additional duties on car imports. According to its own data, it seeks to reduce car tariffs to zero

Currently, the EU imposes higher import duties on the majority of motor vehicles than the United States. Chancellor Angela Merkel said she was ready to negotiate tariff cuts. He needs a common European position for the negotiation of homework, for example in the automotive sector, said Merkel in Berlin. "And then tariff negotiations mean lowering tariffs, which I'm ready to do, not just with the United States of America." Otherwise, there is a threat of violation of the WTO rules.

European companies are extremely nervous

Trump also has problems with his neighbors, Canada and Mexico. His line is controversial in the United States. Above all, the sectors that must fear retaliatory tariffs do not respect their commercial policy. Because American farmers fear China's retaliation for soy and pork, for example, Trump traps the profession in which many of his regulars find themselves. In addition, Canada's retaliation for $ 13 billion worth of goods will affect farmers. Mexico is targeting pork belly producers. "We put all the investments on hold," said Maschhoff Family Foods pork producer Ken Maschhoff, CNBC. "We should be good patriots, and we were, but I do not want to be the patriot who dies at the end of the war."

The escalation between the United States and China is "very nervous" EU embbadies in Beijing. Their fear: the Chinese could offer Washington to buy more in the United States in the future than in Europe to settle the trade dispute. An order for 180 Airbus aircraft has already been postponed, so that Beijing may be able to buy more from the US manufacturer Boeing.

Who does the most?

Punitive tariffs of Chinese against imports of American cars BMW and Mercedes, which supply their factories to the United States of China. "It is feared that no matter how the conflict develops, European companies will be among the losers," he added. Daimler has already given a warning on profits. BMW is also affected. Almost every fifth car that Munich sells on the world's largest car market in China comes from the United States

Beijing has recently lowered import duties on cars from 25 to 15%. But with the new retaliatory measures, they are raised to 40%. Whether China or the United States suffer the most from a trade war is a subject of debate among the experts. The US economy lives at twelve percent of exports, the Chinese economy up to 20 percent. The United States exported $ 130 billion to China in 2017, while China shipped $ 500 billion to the United States

. But the dispute should not be limited to foreign trade. Beijing could also make life difficult for Chinese companies operating in China. As in disputes with Japan and South Korea, the Chinese authorities may harbad companies with regard to fire safety, hygiene, safety at work or customs clearance.

Source: n-tv.de