Europe must respond to Trump's duties with more free trade agreements, with German-French economists. At the same time, their calculations indicate that duties are likely to hit more heavy in the US than in the EU. Economists from Germany and France call on the EU to advance free trade agreements with another economical areas in the context of a tariff dispute with the US. The EU must "play a leading function in defending the world's trade order", says experts in a message by the French Conseil d'analyse économique and the French-German Council of economical Experts.
The more open the planet economy remains, despite US tariffs, the lower the customs costs for European economies. "The EU must support European companies whose access to US markets is limited in beginning fresh export markets and uncovering fresh trading partners," said Monika Schnitzer, co-chair of the French-German economical Expert Board.
Calculation: Trump's duties will hit the US harder than in the EU
The French-German economists consider it highly likely that the US basic rate of work of 10 percent will be constant. However, the analysis shows that the economical consequences for the US will be more severe than for the EU. According to economist calculations, the estimated decrease in real production in the US is between 1.0 and 1.63 percent. On the another hand, the impact of tariff increases on EU associate States is likely to be importantly lower and will be around 0.15% of gross home product.
In the second script analysed with the announcement of higher customs tariffs announced by Trump on Liberation Day in April, the decline in real production would be more pronounced: it would then be between 0.22 and 0.33 per cent in the EU.
The EU should usage the 90-day suspension of any US tariffs to sign a trade agreement with the Mercosur countries of Latin America and velocity up trade agreements with another countries – economists write.
"At the same time, it must prepare decisive measures in case the US administration restores threatening and presently suspended common duties", stressed Schnitzer, president of the Council of economical Experts (Wirtschaftsweise). Economists mention restrictions on access to the EU market, regulatory measures on digital services and countervailing duties on US products.
Economist Gabriel Felbermayr late besides called for more free trade agreements within the EU. As the erstwhile head of the Institute of planet Economy in Kilonia late said, not only the Mercosur agreement is already practically ready to sign, but advanced negotiations are besides underway with India and Australia.
