LONDON (ICIS)--The export-intensive German chemical industry continues watching with concern US plans to impose a tax on imports entering the country as it would set the “wrong course” for US-EU trade relations, the director-general at trade group VCI said on Tuesday.
In a written response to ICIS, Utz Tillmann said increasingly economic protectionist measures from the US would prompt other countries to respond in kind, opening up “danger of an escalation” which would ultimately damage global trade and growth.
The German chemical industry is a heavy exporter, with 60% of its sales in 2016 sold abroad – €111.5bn out of a total of €183bn.
Immediately after the US presidential election which elected Donald Trump, Germany’s chemical trade group said it was concerned about the uncertainty, although there was a general belief that the pressure from business and exporters in the US would soften the President’s protectionist stance during the campaign.
However, actions taken by Trump after he took office on 20 January, like withdrawing from the Transpacific Partnership (TPP) or plans to impose a tax on imported goods in order to boost the US' own production, have rung alarm bells among European exporters.
“Germany’s chemical-pharmaceutical industry views with concern the trade policy developments stateside. The announcement by the US President of high import tariffs sets the wrong course for economic growth on both sides of the Atlantic,” said Tillmann.
“It also involves the danger of an escalation of protectionist countermeasures in world trade.”
However, the VCI’s director-general added that “at the moment” German chemicals have not registered a concrete impact from potential protectionist measures and praised the contribution they make to the US manufacturing sector.
According to Tillmann, 130 subsidiaries of German chemical companies are based in the US, employing 71,000 employees with sales of €61bn/year.
“This exceeds three times the US exports from German chemical businesses and is the result of open markets,” he said.
However, the trade deficit the US accumulates with countries like Germany is one of the reasons argued by Trump during the campaign to lobby for more protectionist measures.
Pictured above: Hamburg's port
Source: Carsten Leuzinger/imageBROKER/REX/Shutterstock