Published On: Mon, Feb 18th, 2019

Expert: In US Punitive Tariffs No Big Consequences For Carmakers

IFO estimates that German car exports could plummet by half, Dudenhöffer described as “unworldly”.

Cold Trade Wars

The car expert Ferdinand Dudenhoeffer sees the plans of the United States, import cars to be classified as a threat to national security and with punitive tariffs to prove, not as a serious threat to the German automotive industry. The punitive tariffs could prove to be ineffective, Dudenhöffer said on Sunday.

For example, punitive tariffs of 25 percent could not deter buyers of expensive luxury-class cars.

For German mid-range car models, production capacity in the US could be increased. Low-priced cars are already being built in Mexico and could easily be introduced to the US under the NAFTA Free Trade Agreement. Also in the supply of car parts Dudenhöffer sees no problem. Large car parts would be manufactured by US suppliers.

Recent warnings of the Munich Ifo Institute called Dudenhöffer “unworldly”. The Ifo Institute had warned on Friday that German car exports to the US could decline by almost half in the long term in the case of US tariffs. For the German car exports this would be a minus of seven to eight percent, said the Ifo economics expert, the Austrian Gabriel Felbermayr, the Deutschlandfunk. He warned against a “truly existential threat” for the German automotive industry and also for suppliers in different countries.

According to Dudenhöffer, US President Donald Trump is not primarily concerned with German cars. On the contrary, the punitive tariffs are a means of exerting pressure on the EU and of enforcing negotiations on the agricultural market. Trump attacks the Germans because he can not attack the French directly.

Trump also wants to extend the trade talks with the EU to the agricultural sector in order to record a success for his clientele among US farmers. Countries like France with their own strong farmers’ lobby reject this categorically.