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October 22, 2019

American customs duties may confront Germany and France

customs dutiesGermany is ready to offer trade concessions to the US in order to prevent the imposition of customs duties on European aluminum and steel imports, demonstrating its differences with France regarding methods of avoiding a trade war. The authorities in Berlin are ready to discuss with the European Union any options to counteract the US threat of new duties. However, this flexible approach to protecting the German industry risks giving rise to the disapproval of other European countries, including France. According to a state official in Paris, the country does not agree with the bloc to make concessions to Washington.

Although it remains a little more than four weeks before the expiration of the moratorium on US steel and aluminum duty, the EU is already trying to establish a common approach to the US administration’s actions.

Germany supports any agreement within the bloc that includes new customs rules on a series of products including cars, machinery, food and medicines. However, this position is not shared by the Paris authorities, who want instead to focus on putting pressure on China on issues such as providing subsidies and overcapacity in the steel industry.

The German Chancellor Angela Merkel has already explored the moods among the German automotive industry whether it supports a possible 10% reduction in European duties on cars. According to unofficial information, the business has reacted positively to the idea.

“The dialogue with the US should continue at the highest political level”, said the official statement of the German Association of the Automotive Industry. “We support sustainable and credible agreements that are compatible with the World Trade Organization (WTO)”, adds the organization.

The German Economy Minister Peter Altmaier, who met last week with US Secretary of Trade Wilbur Ross, told that he had not made any proposals to the US to secure the moratorium. Later, he denied to had offered lower duties on car imports.

The EU average duties on imported goods amounted to about 3%, and those in the USA – 2.4%, according to WTO figures. And while the US President Donald Trump opts for bilateral agreements, Angela Merkel insists on a common approach to EU countries on the basis of WTO rules that do not allow for country and product tariff cuts.

Under these provisions, the members of the organization may offer more preferential market access than WTO standards, as long as the agreements cover “substantially all” trade between the participants in the transaction.

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