Feeling the Heat: German Small Businesses Worry About Hidden Effects of US Tariffs
Customs Officials in the U.S. have highlighted that small and medium-sized enterprises (SMEs) in Germany are predominantly apprehensive about the indirect consequences, possibly referring to unintended or secondary effects of specific actions or decisions, on their businesses. - German Small and Medium Enterprises Worry About Unintended Consequences of U.S. Tariffs
Small and medium-sized enterprises (SMEs) in Germany, particularly those in the metal, automobile, and machinery sectors, are sweating over the indirect consequences of US tariffs, according to a survey by DZ Bank.
The Not-So-Obvious Costs
The US tariffs on steel and automotive components raise input costs for German manufacturers, squeezing their profit margins. This puts them at a disadvantage in the competitive global market, especially in the US, a significant export market.
Moreover, the complex supply chains connecting German SMEs to the US and Mexico become more expensive and complex with tariffs, forcing them to reconsider their supply sources or contend with delayed production and increased costs.
直送
The US tariffs are expected to lead to reduced demand for German exports to the US market, as American importers seek cheaper alternatives or cut back on volumes due to higher prices.
SMEs are at the mercy of the overall economic climate. Slower global growth and mounting trade tensions are forecast to decrease global exports by $480 billion by 2025, denting investment and demand for machinery and automotive products, thereby indirectly impacting SMEs.
統計資料
According to DZ Bank's survey of 1,000 SME owners and managers conducted in March 2021, two-thirds of businesses in the metal, automotive, and machinery sectors anticipate experiencing negative indirect consequences due to US tariffs. In comparison, only 19% expect no unfavorable effects.
While 29% of companies are not vexed about the US tariffs, potential counter-tariffs from the EU could pose a greater threat. Approximately 29% anticipate direct consequences, such as higher purchase prices, and only 19% expect no negative consequences.
However, DZ Bank analyst Claus Niegsch remains unalarmed about the potential cost hikes, suggesting that cheaper imported goods previously slated for the US market might flood Europe instead, reducing prices there.
Germany, EU, and the US
The survey suggests that SMEs in Germany are apprehensive about the indirect effects of US tariffs on their businesses, adding another twist to the ongoing trade dispute between the US and the EU.
- Germany
- DZ Bank AG
- USA
- SMEs
- EU
- Metal
- Machinery
Insights
- With trade tensions escalating, German SMEs in the metal, automotive, and machinery sectors grapple with increased production costs, disrupted supply chains, reduced export demand, and overall economic uncertainty.
- The indirect consequences of US tariffs threaten the viability and growth potential of these SMEs in the wake of the global trade spat.
- Regulatory and administrative hurdles, as well as potential financial constraints, exacerbate the challenges faced by SMEs amid an unpredictable tariff landscape.
- SMEs brace themselves for a challenging period, while hopeful that the turbulence in global trade eventually subsides.
- The metal, automobile, and machinery sectors in EC countries, particularly German SMEs, are concerned about the not-so-obvious costs associated with the US tariffs, which raise input costs and put them at a disadvantage in the competitive global market.
- Tariffs on steel and automotive components have complexified and increased the costs of supply chains connecting German SMEs to the US and Mexico, forcing them to reassess their supply sources, handle delayed production, and bear increased costs.
- The US tariffs are predicted to lead to a decrease in demand for German exports to the US market, as American importers search for cheaper alternatives or curtail volumes due to higher prices.
- SMEs in EC countries, such as Germany, are anxious about the indirect effects of US tariffs on their businesses, adding another layer of complexity to the ongoing trade dispute between the US and the EU.
