The German chamber of commerce has warned that US steel tariffs could trigger a trade war with major trading partners, according to Reuters. Analysts estimate that such a conflict could cut growth in Germany by up to 1 percentage point.
On 13 February the US President said he was considering a range of options to stem the flow of steel and aluminium imports, which he says are unfairly hurting US producers. Options under consideration include tariffs and quotas.
The comments were the strongest signal in several months that the US will restrict imports of the metals. Such a policy was indicated by the election pledge to ‘put America first’ and protect US workers from foreign competition.
Martin Wansleben, managing director at Germany’s DIHK Chambers of Industry and Commerce, said tariffs would, in the longer term, lead to the imposition of higher prices on US consumers and could trigger a worldwide trade war.
Wansleben said: “With the proposal of new import tariffs, the US government is undermining the positive investment incentives from its tax reform. […] As appealing as the tax relief from the recent US tax reform may be, new import barriers raise prices and disrupt international production chains.”
After the rest of the EU, the US is Germany’s most important export destination. The German economy is experiencing a consumer-led growth period supported by a boost in exports and company investment. In 2017 German GDP grew 2.5%. It is predicted that 2.7% growth will be achieved in 2018.