Gotta Worry About More Than Just the Tariffs: US Tariffs Pose Indirect Concerns for German SMEs, Especially in the Metal, Auto, and Machinery Sectors
German Medium-Sized Firms Frets Over Secondary Tariff Effects in U.S. - Smaller Businesses in Germany Worry Over Potential Wide-Reaching Impacts of U.S. Tariffs
You know the drill, folks. The DZ Bank recently surveyed a grand ol' bunch of 1,000 German small and medium-sized enterprise (SME) owners and managing directors, and guess what they found? Yep, you guessed it. U.S. tariffs ain't all sunshine and lollipops, especially for those businesses in the metal, automotive, and machinery fields.
Why's that, you ask? Well, it turns out that these companies are freaking out about potential indirect consequences, like their own product prices skyrocketing in the U.S. market or a decrease in demand for exports. Here's the kicker: it's not even the direct tariffs hitting 'em hard, but possible counter-tariffs from the old continent that could do real damage.
Now, here's where it gets intriguing. DZ analyst Claus Niegsch reckons the worry over higher costs might be premature. Why? US goods might get pricier, but other goods originally intended for the American market could end up here in Europe instead, thanks to President Trump's tariffs, and potentially lower our prices.
So, what's the lowdown on these indirect consequences? Let's dig a little deeper. Many companies are worried about disruptions to their supply chains, with price increases by suppliers being a potential nightmare. And that's not all; the uncertainty caused by tariff disputes might force SMEs to seek new sales markets, possibly leading to the diversification of export markets away from the U.S. Then again, there's the economic stagnation factor – the broader economic impact of tariffs could hinder growth and investment prospects for German SMEs, not to mention global economic challenges and those pesky high energy costs.
Lastly, competitive pressure is on the rise, as SMEs might need to boost their prices due to higher input costs, making their products less competitive in global markets. In short, these sectors are staring down the barrel of increased operational costs, market volatility, and potential impacts on sales volumes.
Now, there you have it, folks. Even if you're not knee-deep in metals, autos, or machinery, it's safe to say that the ripple effects of US tariffs on these sectors could make waves that reach us all. So keep an eye on those headlines, and let's hope for a swift resolution to this tariff tango.
- Germany
- DZ Bank AG
- USA
- SMEs
- EU
- Frankfurt am Main
- Metal
- Machinery
- Market Volatility
- Supply Chain Disruptions
- Economic Stagnation
- Competitive Pressure
[1] https://www.reuters.com/article/us-usa-trade-germany/german-firms-may-pass-us-metal-tariff-costs-to-customers-reuters-poll-idUSKBN1HZ1XF[2] https://www.businessinsider.com/us-german-companies-tariffs-ponding-2018-6[3] https://www.bloomberg.com/news/articles/2018-03-29/european-equipment-makers-braced-for-u-s-tariffs-on-their-exports[4] https://www.ft.com/content/4c37440a-ccbf-11e8-b9cb-7b722b886a6f[5] https://www.dw.com/en/germanys-industry-bracing-for-us-tariffs/a-41696782
- The metal, automotive, and machinery sectors within EC countries, such as Germany, are particularly concerned about US tariffs due to potential indirect consequences, like escalating product prices in the US market and decreased demand for exports.
- DZ Bank analyst, Claus Niegsch, suggests that the worry over higher costs could be premature, since possible counter-tariffs from the EU might cause US goods to become pricier, but other goods originally intended for the American market could end up in Europe instead.
- Many SMEs in these sectors are anxious about supply chain disruptions and price increases by suppliers, which could force businesses to seek new sales markets, potentially leading to the diversification of export markets away from the US.
- The broader economic impact of tariffs could cause economic stagnation and hinder growth and investment prospects for German SMEs, while also increasing competitive pressure as businesses might need to boost their prices due to higher input costs, making their products less competitive in global markets.
