With the start of the application of the new customs duties announced by US President Donald Trump, producers around Europe felt their influence, and some went to stop shipments.
On the other hand, other producers raised the prices or were forced to reduce their profits margin, while some fear that they would not bear the weight of those fees.
The United States will impose 15% customs duties on most European exports starting today, Friday, as part of a broader set of drawings that are scheduled to reshape the World Trade map. Although it retracted the high rates that Trump threatened, the current levels remain the highest in the 1930s.
“The companies wake up to the fact that we are dealing with the average customs duties is the highest historically … it is difficult to see this happening without having disastrous consequences for the American economy,” said Deputy Secretary -General of the International Chamber of Commerce, Andrew Wilson.
He added that the Chamber is witnessing a delay in shipments, while companies re -evaluate the strategies of supply chains, as trade with the United States is now “shockingly difficult”.
“The complexity of doing business with the United States has reached levels that no one had imagined,” he said.
In the Mozel River Valley in Germany, the maker Johannes Silbach said that customs duties are harmful to the industry on both sides of the Atlantic Ocean. European countries were hoping to reach a zero agreement against zero customs duties, but they are now facing 15%fees, with the sectors continuing.
“The customs are harmful to the Americans and harm us,” Silbach said in a warehouse surrounded by wine boxes written on it (the United States of America) with black letters.
“Thousands of families that produce wine in Europe and thousands of families working in importing, selling, retail and restaurants in the United States depend on the flow from both sides,” adding that jobs and profits will be affected.
The various sectors face varying degrees of the crisis. Luxury brands have a greater pricing power to adapt to customs duties. And major companies can bear some losses in the profit margin or transfer some production to the United States, but not all often.
Even major consumer commodity companies such as Procter and Gamble indicated that prices in the United States to deal with the impact of customs duties. Adidas said it may raise prices.
The Reuters follower for international customs duties shows that at least 99 companies out of nearly 300 companies monitored by the follower announced the increase in prices in response to the trade war and most of them from Europe.
Trump says customs duties are a response to the ongoing commercial imbalances with his country and the decline in the manufacturing force of the United States and that these moves will bring jobs and investment to the country.
