VDMA urges de-escalation as US tariffs take effect on Chinese goods

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The VDMA then called on the EU to “take the offensive” and set transatlantic free trade negotiations in motion.

The German rubber & plastics machinery manufacturers trade association, the VDMA, has denounced a trade war between the US and the European Union, saying the dispute is “getting down to the nitty-gritty”.

Despite all efforts to defuse the conflict, US President Trump's threat to impose a punitive tariff of 20% on cars from Europe remains unresolved, said the VDMA in a 5 July statement.

"This and the countermeasures announced by the EU would mean significant cuts in bilateral trade. We'll get down to the nitty-gritty," warned VDMA executive director Thilo Brodtmann.

The VDMA then called on the EU to “take the offensive” and set transatlantic free trade negotiations in motion.

According to the German official, an exclusive reduction in car tariffs with the US will not work, as WTO-compliant tariff reductions can only be implemented with all trading partners on board.

“We are calling for a lean free trade agreement with the US that will remove all industrial tariffs and non-tariff barriers to trade,” noted Brodtmann.

This, he added, would remove the issue of bilateral customs duties “once and for all."

The announcement came ahead of US trade tariffs on $34bn (€29bn) Chinese goods 6 July, amid threats of further retaliatory measures.

"This ‘tit-for-tat’-game between two major economic blocs is likely to put a strain on global trade as a whole because of the complex and fragile supply chains,” the VDMA executive noted.

This, he warned, could set a precedent for other trading partners.

"The only acceptable way to address what the US calls China's unfair trade practices is to take them to the WTO arbitral tribunal. Both the EU and the US have taken this path," explains Brodtmann.

According to VDMA, the mechanical and plant engineering industry in Germany has been affected by the trade dispute between the US and China.

This, VDMA said is because “almost all” mechanical engineering products are included in the first US list of punitive tariffs, affecting VDMA member companies that supply the US from their production facilities in China.

Plastics processing machinery falls under President Trump's additional 25% tariffs that began 6 July. Click here to read more.

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