EU-US trade deal will come with consequences, German industries warn
Von der Leyen and US President Donald Trump struck a tentative trade deal to avert a potentially devastating tariff war between two of the world's largest economies on Sunday. The majority of EU exports bound for the US will be subject to a 15% tariff.
According to a statement made by von der Leyen, this also includes billions of euros in EU investments in the US, as well as the purchase of defence equipment.
Tariffs of 15% will now apply to car exports to the US, compared to the previously announced 25%. Import duties on steel are to remain unchanged at 50%.
The German economy can breathe a sigh of relief for the time being, according to Managing Director of the German Chamber of Industry and Commerce Helena Melnikov.
Melnikov said that worse has been prevented, however, "the deal has its price, and this price is also at the expense of the German and European economies."
Wolfgang Niedermark from the Federation of German Industries was more critical. He stated that even a tariff rate of 15% would have an "immense negative impact" on Germany's export-oriented industry.
The Federal Association of Wholesale, Foreign Trade and Service also spoke of a "painful compromise" and warned that supply chains would change and prices would rise, saying the deal will cost Germany growth, prosperity and jobs.
Federal Chancellor Friedrich Merz, who was satisfied with Sunday's agreement, wrote on X that the deal showed it was possible to "avert a trade conflict".
However, a review of Trump's actions to date raises doubts about the reliability of the agreement and the US president's words.
In an interview with the Funke media group, Michael Hüther, director of the Institute for the German Economy, said that concerns remained as Trump had never completely taken tariff threats off the table.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Euronews
13 minutes ago
- Euronews
European leaders condemn 'sickening' Hamas videos of hostages in Gaza
Western leaders have expressed outrage over recently released videos showing two Israeli hostages in Gaza appearing emaciated and distressed, with growing pressure on both Hamas and Israel to allow urgent humanitarian access. UK Foreign Secretary David Lammy condemned the footage as "sickening," saying, 'images of hostages being paraded for propaganda are sickening,' and reiterated the UK's call for their 'unconditional' release. French President Emmanuel Macron called the videos a reflection of Hamas' 'abject cruelty,' and stressed that France continues to fight for their release, a ceasefire and increased humanitarian access. "The absolute priority for France is the immediate release of all the hostages," Macron said. German Chancellor Friedrich Merz said he was 'appalled' and reiterated that the release of all hostages must precede any ceasefire agreement. "Israel will not reciprocate Hamas' cynicism and must continue to provide humanitarian aid," Merz added. German Foreign Minister Johann Wadephul, who returned from a trip to Israel and the Palestinian territories on Friday, also stated he was shocked by the "perfidity" of the hostages' "tormentors". EU foreign policy chief Kaja Kallas slammed the images as "appalling and expos(ing) the barbarity of Hamas", calling for the release of "all hostages ... immediately and unconditionally". 'Living skeleton buried alive' The videos, released separately by Hamas and Islamic Jihad on Thursday, show Rom Braslavski, 21, and Evyatar David, 24, visibly weakened and in distress, according to BBC reports. Both were abducted from the Nova music festival on 7 October 2023 during the Hamas-led attack on southern Israel. In the videos, Braslavski, crying, said he had eaten just 'three crumbs of falafel' and was unable to stand. David, also visibly malnourished, was filmed digging what he described as his own grave. His relatives accused Hamas of deliberately starving him, describing him as 'a living skeleton, buried alive.' 'I haven't eaten for days… I barely got drinking water,' he said. Israeli Prime Minister Benjamin Netanyahu described the footage as 'profoundly shocking' and pledged to the hostages' families that efforts to secure their release 'will continue constantly and relentlessly.' On Sunday, he also urged the International Committee of the Red Cross (ICRC) to intervene to provide food and medical support to those still in captivity. The ICRC said it was 'appalled' by the footage, which it called 'stark evidence of the life-threatening conditions' the hostages are facing. The organisation renewed its call for immediate access to assess their condition, offer care and facilitate contact with their families. During the weekend, individuals gathered in Tel Aviv in a protest led by the families of hostages. Speaking at the rally, the families of Braslavski and David demanded urgent action: 'Everyone must get out of hell, now.' 'They managed to break Rom. He has simply been forgotten there,' Braslavski's family said in a statement appealing directly to Israeli and US leaders. Hamas's military wing, the al-Qassam Brigades, denied intentionally starving the captives, claiming that hostages receive the same food as fighters and civilians amid the hunger crisis in Gaza. The group said it would 'respond positively' to Red Cross aid deliveries if humanitarian corridors are opened and airstrikes are paused during those deliveries, news sources reported. A total of 49 hostages remain in Gaza, with 27 presumed to be dead, according to available information.
Euronews
13 minutes ago
- Euronews
Western leaders condemn Hamas videos of captured hostages in Gaza
Western leaders have expressed outrage over recently released videos showing two Israeli hostages in Gaza appearing emaciated and distressed, with growing pressure on both Hamas and Israel to allow urgent humanitarian access. UK Foreign Secretary David Lammy condemned the footage as "sickening," saying, 'images of hostages being paraded for propaganda are sickening,' and reiterated the UK's call for their 'unconditional' release. French President Emmanuel Macron called the videos a reflection of Hamas' 'abject cruelty,' and stressed that France continues to fight for their release, a ceasefire and increased humanitarian access. "The absolute priority for France is the immediate release of all the hostages," Macron said. German Chancellor Friedrich Merz said he was 'appalled' and reiterated that the release of all hostages must precede any ceasefire agreement. "Israel will not reciprocate Hamas' cynicism and must continue to provide humanitarian aid," Merz added. German Foreign Minister Johann Wadephul, who returned from a trip to Israel and the Palestinian territories on Friday, also stated he was shocked by the "perfidity" of the hostages' "tormentors". EU foreign policy chief Kaja Kallas slammed the images as "appalling and expos(ing) the barbarity of Hamas", calling for the release of "all hostages ... immediately and unconditionally". 'Living skeleton buried alive' The videos, released separately by Hamas and Islamic Jihad on Thursday, show Rom Braslavski, 21, and Evyatar David, 24, visibly weakened and in distress, according to BBC reports. Both were abducted from the Nova music festival on 7 October 2023 during the Hamas-led attack on southern Israel. In the videos, Braslavski, crying, said he had eaten just 'three crumbs of falafel' and was unable to stand. David, also visibly malnourished, was filmed digging what he described as his own grave. His relatives accused Hamas of deliberately starving him, describing him as 'a living skeleton, buried alive.' 'I haven't eaten for days… I barely got drinking water,' he said. Israeli Prime Minister Benjamin Netanyahu described the footage as 'profoundly shocking' and pledged to the hostages' families that efforts to secure their release 'will continue constantly and relentlessly.' On Sunday, he also urged the International Committee of the Red Cross (ICRC) to intervene to provide food and medical support to those still in captivity. The ICRC said it was 'appalled' by the footage, which it called 'stark evidence of the life-threatening conditions' the hostages are facing. The organisation renewed its call for immediate access to assess their condition, offer care and facilitate contact with their families. During the weekend, individuals gathered in Tel Aviv in a protest led by the families of hostages. Speaking at the rally, the families of Braslavski and David demanded urgent action: 'Everyone must get out of hell, now.' 'They managed to break Rom. He has simply been forgotten there,' Braslavski's family said in a statement appealing directly to Israeli and US leaders. Hamas's military wing, the al-Qassam Brigades, denied intentionally starving the captives, claiming that hostages receive the same food as fighters and civilians amid the hunger crisis in Gaza. The group said it would 'respond positively' to Red Cross aid deliveries if humanitarian corridors are opened and airstrikes are paused during those deliveries, news sources reported. A total of 49 hostages remain in Gaza, with 27 presumed to be dead, according to available information.
Fashion Network
an hour ago
- Fashion Network
EU brands turn to obscure customs clause to soften blow of Trump's tariffs
Brands like Italy's high-end sneakers maker Golden Goose, outerwear specialist Moncler and fashion label Ferragamo have all touted the strategy. "It's a significant benefit," Moncler executive director Luciano Santel said in a call with analysts, estimating the production cost at around half the import price. The strategy, which can only be invoked for goods clearly destined for sale in the US and involving multiple foreign transactions, is not without risk, however. It requires a detailed paperwork trail, a firm grip on supply chains and legal structures to handle the required transactions. Consultants including KPMG and PwC have seen a surge this year in enquiries from companies into how to use this method to ease the burden of Trump's tariffs. "We've got three times more requests than usual," for mitigation strategies including the First Sale rule, said Ruth Guerra, a partner at KPMG in Paris, adding that the rule could also be combined with other measures. To benefit from lower customs duties, a company must prove that US-bound products have gone through multiple transactions. Usually that means the goods are sold from the factory gate to a middleman and then to a US-based company handling the goods. All transactions must be handled at arm's length by clearly distinct entities. Usually a US subsidiary is involved to avoid revealing confidential information to an external entity, PwC custom and tax lawyer Francesco Pizzo explained. "In our case the 15% tariffs will potentially translate into a 3% impact on the US retail price", Golden Goose CEO Silvio Campara said, adding that the US accounted for roughly 35% of its revenue. While several major textile and apparel companies have been using First Sale for a while, many had overlooked the strategy while the tariff environment remained low, said Mark Ludwig, national leader of trade and tariff advisory services at consultancy RSM in New York. "Now the cost-effectiveness is much higher," said Lucio Miranda, founder of consultancy firm ExportUSA, who expects a jump in First Sale use with interest from companies in other industries. There is no publicly available data on goods imported through the First Sale rule, but a 2009 investigation by the US International Trade Commission found that 8.5% of importing entities over a year used the workaround, equivalent to 2.4% of total US import value. Nearly half of that amount was linked to footwear and apparel. For French cosmetics producers, US duties present a new challenge as the industry had benefited from zero tariffs. "While the agreement brings an end to uncertainty, it brings a significant threat to the French cosmetics industry," said Emmanuel Guichard, head of French cosmetics lobby group Febea. The First Sale rule is also only available to companies that can comply with a strict process which entails other risks as well. "One of the biggest problems with selecting First Sale is that only fancy people can truly afford it - both the compliance costs and the risks of audit that come with it," said US-based tariff and trade lawyer Michael T. Cone. Improper use could also lead to penalties, he said, noting that the US Customs and Border Protection agency routinely audits and denies use of the rule. "Importers must proceed with utmost caution,' he said.
