Germany: Trump’s Possible Tariffs Would Cause Very Serious Damage

Future customs duties announced by President-elect Donald Trump have sent authorities in Germany, the largest US trading partner in Europe, into a state of unrest. Michael Link (pictured), the German government’s transatlantic cooperation coordinator, sharply criticized Trump’s intention to impose prohibitive duties on imports from Mexico, Canada, and China. “The announced import tariffs demonstrate once again Trump’s political style: he unites perceived allies and rivals. By destroying stable alliances in a fragile geopolitical situation, Trump will do serious damage to the global economy,” said Link, according to whom “Germany should prepare in advance to be a target of Trump. Instead of waiting for his protectionist measures, we need decisive economic reforms, such as business tax cuts.”

Any American duties on European exports to the USA would represent a “stroke of grace” for German industry, which has suffered an unprecedented economic crisis. The decision to turn away from low-cost Russian gas has caused electricity prices to skyrocket, bringing many energy-intensive German industries, from steel to automobiles, to their knees.

German Economy Minister Robert Habeck advocated lower electricity prices as “a key measure to combat Germany’s economic weakness.” According to Habeck, “the main pressure is on traditional industries, namely energy-intensive and automotive. In these sectors, but not only, lower electricity prices would help. Not only should we ensure that grid tariffs are subsidized in the short term, which I favor, but we should also eliminate infrastructure costs from electricity prices as much as possible, or at least cut them in half for the foreseeable future.”

Among the hardest-hit companies is steel giant ThyssenKrupp, which announced drastic layoffs that could affect 11,000 workers. A tug-of-war is expected between the company and the IG Metall union, which said it “sees no room for negotiation with ThyssenKrupp” over the thousands of job cuts the German company announced yesterday.

“We will in no way discuss this matter with ThyssenKrupp. What the company did was a major provocation. Layoffs for operational reasons and plant closures are our red lines that we draw over and over again. And ThyssenKrupp has crossed them,” said Knut Giesler (pictured), Regional Director of IG Metall and Vice President of the Supervisory Board of ThyssenKrupp Steel. “The concept of the future also includes ideas, not just closing and mowing with a lawnmower. Until layoffs and plant closings are off the table again and a long-term funding solution is in place, the union will not be part of the negotiations at the board table,” Giesler finally said.