The Chancellor will meet US president Donald Trump on Friday to talk about planned US tariffs on steel and aluminium imports, which could also hit Europe. The EU is already planning to take action. Rolf Lang Hammer is an expert in international trade policy at Institute for World Economy in Kiel and advises against new EU import duties.

No question: The EU Mitgliedsstaatenund ir economies are hit hard as a result of ir large investments in Diversitytrade China and because of internationally networked production and Absatzkettenvon a possible trade conflict between two countries.

But now even dieZollmauern up or threatening to do so does not disarm conflict. Contrary: This only increases damage. Instead, EU should consider reducing tariffs. It itself would have economic benefits, as DasBeispiel of tariffs on Autoimports shows.

Compared to durchschnittlichenImportzoll of about four percent on industrial goods, tariffs on Autoimporteaus USA are ten percent out. US president Donald Trump hangs up on se ten percent and criticizes m – tariffs originate from anor time and were only directed against Japanese autoimports: Siewurden a quarter of a century ago in last MultilateralenLiberalisierungsrunde (Uruguay Round). They should make it easier for individual Märktenwie Italy and France to liberalise trade by gradually mitigating consequences for ir car production. The USAstimmten of EU policy at that time because y were more important to import facilities in DerLandwirtschaft than to deliver cars to EU. No one sprichute.

Rolf J. Lang Hammer

The Economist works at Institute of World Economy in Kiel and was vice president until 2012.

It would be good for EU to reduce se import duties unilaterally. Trump demands exactly this, but on grounds that US also has a negative trade balance with Europe because of lower Importzölleauf cars. That is, of course, ökonomischhaltlos and EU should not respond to this populist argument.

There are or gewichtigereGründe for EU to reduce in self-interest DieZölle on car imports. Because peak tariffs prevent absehbarenund necessary structural change in European car industry. Over past quarter century, cross-border supply chains have expanded considerably. Platform Productions and UnternehmensübergreifendeKooperationen of companies such as Renault and Nissan have replaced NationalerSichtweisen, which still defined customs policy of Uruguay Round. In se supply chains, differences between customs duties on intermediate services UndEndprodukte decisive for effective protection that value-added levels between pre-and end products enjoy.

Duties protect Assembly performance

In EU, about derdurchschnittliche inches are on transport equipment (pre-power) at about four percent, on finished cars at ten percent. This means that anschließendeMontage has a higher effective customs protection than nominal ten per cent. This is particularly true for German car industry, as it imports and assembles, in particular, pre-production from EU countries duty-free within framework of internal market.

The German Produktionwird is refore particularly montagelastig and labour-intensive due to customs structure. This is an obstacle to impending structural change towards neuenAntriebstechnologien such as electric motors and or prepayments. Here Esdarauf will arrive to build up a competitive production capacity for storage undKommunikationsausrüstungen, i.e. typical prepayments. Only validity European car industry compete with new competitors such as China. Scarce workers would not be kept unnecessarily and inefficient in Montagetätigkeitenalten style.

Promoting competitiveness

One way of doing this is to dieSenkung duty on finished cars to level of customs duties of intermediates. This would no longer give input to final products benachteiligenund incentives to employ workers in activities or than car assembly. Such a unilateral step would refore not only be a glaubwürdigerBeitrag for relaxation in trade conflict and an offer to all partners to follow ir own liberalisation measures. In particular, it would substantially promote competitiveness of neueneuropäischen car production in context of Enormentechnologiebedingten structural change. If Eininvestitionshemmender trade conflict were to be defused, Wäreallen helped.

Date Of Update: 28 April 2018, 12:02