VDMA urges de-escalation as US tariffs take effect on Chinese goods

Frankfurt am Main, Germany – German rubber & plastics machinery manufacturers trade association, the VDMA has denounced a trade war between the US and the European Union.

Despite all efforts to defuse the conflict, US president Trump's threat to impose a punitive tariff of 20% on cars from Europe remains unresolved, VDMA noted in a 5 July statement.

"This and the countermeasures announced by the EU would mean significant cuts in bilateral trade. We'll get down to the nitty-gritty," warned VDMA executive director Thilo Brodtmann.

The VDMA called on the EU to “take the offensive” and set transatlantic free trade negotiations in motion - arguing that an exclusive reduction in car tariffs with the US would not work.

This, it said, was because WTO-compliant tariff reductions can only be implemented with all trading partners on board.

“We are calling for a lean free-trade agreement with the US that will remove all industrial tariffs and non-tariff barriers to trade,” said Brodtmann.

This, he added, would remove the issue of bilateral customs duties “once and for all."

The announcement came ahead of the imposition of US trade tariffs on $34 billion Chinese goods on 6 July, and likely retaliatory measures by China.

According to the VDMA, the mechanical and plant engineering industry in Germany has been affected by the trade dispute between the US and China.

This, it explained, is because “almost all” mechanical engineering products are included in the first US list of punitive tariffs - including those of VDMA member companies that supply the US from production facilities in China.

Rubber & plastics processing machinery are included in the products facing additional tariffs of 25% on goods from China.

"This ‘tit-for-tat’-game between two major economic blocs is likely to put a strain on global trade as a whole because of the complex and fragile supply chains,” the VDMA executive commented.

"The only acceptable way to address what the US calls China's unfair trade practices is to take them to the WTO arbitral tribunal. Both the EU and the US have taken this path," he said.