Germany’s economy is particularly dependent on its automotive industry – and is therefore as vulnerable to threats from US President Donald Trump, customs duties imposed on imports of German cars in the USA.

trump’s Minister of the economy, Wilbur Ross has brought customs surcharges by 25 percent on Car imports and intermediate goods from abroad into the conversation. The Federal Ministry of economic Affairs is even assumed that Germany will be “the world’s most affected” – before the US neighboring countries, such as Mexico and Canada.

Only a moderate impact on Germany

really? The Swiss private economic research and consulting Institute Prognos has undertaken extensive calculations, such as US-the impact of tariff barriers in the coming years, both important trading partners such as Germany as well as key industries such as the manufacture of cars. The investigation, which is the MIRROR exclusive, are nevertheless clear: The German economy would suffer from a customs-Offensive by the United States, overall, the expected consequences for Germany were “relatively moderate”.

The assessment of the impact of American duties is part of the “Germany reports” (read more here) . Prognos uses for its calculations, a global forecasting and simulation model called “View”. For the assessment of the customs, the researchers have to follow in the model two different scenarios fed:

The base forecast assumes that would develop the world economy, largely without any major disruption – a world without Trumponomics , so to speak.

In the scenario “Trade dispute” of the United States to impose, in contrast, punitive tariffs in different sectors. The already implemented US customs duty on Aluminium (ten percent), steel (25 percent), and Goods to the value of $ 50 billion from China (25 percent). Also, it is assumed that Trump imposed, as announced duties on more Chinese imports to the value of $ 200 billion – and that the trade partner of the United States defend themselves with customs duties. In addition, the country’s auto industry significantly – under-Prognos that Trump the threats of action and the punitive tariffs on passenger Cars in the amount of 25 percent is imposed.

a Massive impact, especially to Canada and Mexico

The consequences would get in front of all the American continent. The duties would have a significant impact on consumers: in the USA Alone, the import prices 11 percent would skyrocket. Strong and Canada (plus 10.4 percent), and Mexico (8.7 percent) would be affected.

The result: In the year 2025, the prices are on the rise in North America for private consumption by a total of 1.4 per cent (USA) to 3.2 percent (Canada). Also in Germany, the consumers in the case of a trade would have to war for the same numbers Were 1.3 per cent more than without a customs conflict.

The two US neighbours Mexico and Canada are not only the main trading partner of the United States. From there, the majority of Import Cars sold in the United States so far. Although there are no great Mexican or canadian car manufacturers. Both countries are involved as members of the free trade agreement, Nafta closely in cross-border chains, built up by the major global auto companies and their suppliers in the past decades in the Region. Germany is in the case of car imports in the United States, however, only down four, and a correspondingly manageable, the damage that would cause Trumps car duties in this country would be.

Otherwise, the USA would look like. By 2025, a tariff war would reduce US economic power by 1.2 percent, compared to the scenario without trade war. Also Mexico (minus 0.7 percent) and Canada (minus 1.6 percent) were much more affected than the U.S. Overseas trading partners such as Germany, Japan and China.

One reason: the so-called “third market effect”. So Chinese producers, for example, can compensate for the “negative effects almost completely by dodging to gain on other markets and especially in emerging countries, market shares at the expense of the USA”, – stated in the Prognos study.

in a trade conflict, the economic performance in Germany “in the year 2025, to 15 billion euros, or 0.5 percent lower than in the baseline scenario without major trade conflicts”, – stated in the study. For a better classification of the numbers Alone, the Volkswagen group generated annual sales of more than 230 billion euros.

Also on the labour market, the consequences would be manageable: by 2025 the US could cost-tariffs in Germany, 50,000 jobs compared to the base scenario. For the classification Alone, in the year 2017, the German economy has created about 700,000 new Jobs.

Sam Yoon has many years of experiences in journalism. He has covered such areas as information technology, science, sports and politics. Yoon can be reached at 82-2-6956-6698.