December 17, 2018
Steel and aluminum make up only 0.08 and 0.13 (respectively) percent of Bavarian exports to the United States
The imposition of world-wide tariffs on the importation of steel and aluminum has had little direct effect on Bavarian exports to the United States. According a study by the consulting company EY, metals make up only three percent of Bavaria’s exports to the United States. Out of this three percent, aluminum exports make up about 0.13 percent, while Steel make up about 0.08 percent.
In Euro terms, the State of Bavaria exported steel products affected by the tariffs worth 16.9 Million Euros to the United States in 2017. At the same time, it exported aluminum products affected by the tariffs worth 28.8 Million Euros. On the other hand, Bavaria exported automobile and automobile parts worth over 6.7 Billion Euros to the United States in 2017.
Despite the relatively low percentage of steel and aluminum exports to the United States, Bavarian companies producing these goods have to deal with an increase in the costs of their products in the United States. This can in many cases, and depending on how big the company is, and its exposure to American market, as well as its product line, affect their abilities to hire and keep their work force.
As a result, the vbw warns that further escalation of tariff wars between the United States and Europe will damage the economies of both sides. There are no winners in tariff wars. More importantly, at a time when world-wide industry supply chains are interlinked, it is imperative that economic disputes and perceived unfair trade practices are settled at the negotiating tables and not with unilateral imposition of tariffs.
The vbw welcomes the initiatives of the President of the European Commission, Jean-Claude Junker and President Trump to work closely together to avoid the imposition of further tariffs on each other’s products and seek ways to rescind the already imposed tariffs on steel and aluminum and the accompanying retaliatory measures.
The move by the United States to notify Congress about its intention to negotiate a free trade agreement with the European Union must be met with the same enthusiasm in Europe. The vbw stands ready to support this initiative on behalf of its members, the state of Bavaria and the entire Bavarian Economy.