Trade Dispute with USA Mechanical Engineers Warn Against »Crooked Deals«

Shortly before negotiations between the EU and the USA in the trade dispute, the German Engineering Federation VDMA warned against a further escalation.

"Transatlantic trade must be based on clear rules, not on threats and crooked deals," said Ulrich Ackermann, head of the VDMA foreign trade department, in Frankfurt on Tuesday. A pragmatic solution would be a streamlined free trade agreement between the EU and the US with the aim of eliminating all industrial tariffs and lowering technical trade barriers.

On Wednesday, EU Commission President Jean-Claude Juncker and EU Trade Commissioner Cecilia Malmström will travel to the United States for talks. The US had already imposed higher tariffs on steel and aluminum, including from the EU. US President Donald Trump had recently threatened new customs duties on cars from Europe.

20 Percent on Cars

The threatened punitive tariffs of at least 20 percent on cars from the EU must be prevented in the interests of both sides, said Ackermann. VDMA is skeptical about the idea of so-called plurilateral customs agreements, which under the umbrella of the World Trade Organization WTO would only bring about a tariff reduction in a certain sector of the economy. "An agreement with the US should largely liberalize all trade. Only then will we get rid of the vexatious issue of bilateral tariffs once and for all, and the trade dispute will end in the long term," said Ackermann.

According to the association, the USA is the largest foreign market for the German mechanical engineering industry with an export volume of almost 18 billion euros.