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Habeck Warns of Tariff Tensions with the US
2025-02-19 13:29:10

Habeck Warns of Tariff Tensions with the US

Image courtesy of : AFP (MANDEL NGAN)

Robert Habeck, Germany's Federal Minister of Economics, cautions against a looming "tariff spiral" with the United States. The EU is poised to respond to potential tariffs, particularly those threatened by Donald Trump on automobiles, pharmaceuticals, and semiconductors.

Such tariffs could significantly impact the German automotive industry and the broader European market. While Trump plans to elaborate on his tariff plans on April 2, the EU maintains its position to counter any unilateral moves.

Companies with manufacturing bases in the US might be exempt from these potential surcharges. Meanwhile, Habeck is also advocating for greater digital autonomy within the EU to reduce dependence on major tech figures like Elon Musk.

His stance underscores a broader European concern over the influence of large technology companies and the need for digital sovereignty. The economic repercussions of these potential tariffs could strain sectors like the pharmaceutical industry in regions like Baden-Württemberg.

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Trump's Tariff Moves and Global Reactions

President Donald Trump has announced the imposition of 25% tariffs on auto imports, part of a broader strategy to support domestic industries. This policy aims to bring about a level playing field by aligning foreign tariffs with those in the United States. However, the decision has sparked global concern, with China warning of potential economic repercussions, including the risk of a global recession. The United States, already producing over half of the cars it sells domestically, is pushing for reciprocal tariffs to adjust trade balances. In addition to autos, the tariffs extend to pharmaceuticals and semiconductors, further intensifying trade tensions. This move follows previous tariffs on steel and aluminum, with more detailed auto tariff plans expected soon. European and Asian markets are reacting differently. While the DAX in Germany shows resilience, other markets, particularly in Asia, are feeling the strain. The European automotive sector, including giants like Volkswagen, faces challenges due to production facilities in Mexico and Canada. China's response includes counter-tariffs and a formal complaint to the World Trade Organization, highlighting the risks to the multilateral trade system. In Europe, countries like Germany and Austria brace for potential impacts, with concerns about export declines and economic contraction. Meanwhile, American businesses in Vietnam express anxiety over the tariffs, fearing disruptions in supply chains and market access. Despite these challenges, Vietnam continues to see a robust export relationship with the United States. The global economic landscape remains tense as nations navigate the implications of the U.S. tariff policies, with markets and industries worldwide preparing for potential shifts in trade dynamics.

The Ripple Effects of Trump's Tariff Policies

Donald Trump's tariff policy, targeting steel, aluminum, and potentially automobiles, has sparked significant international trade tensions. Initially, Trump announced tariffs of up to 25% on imports from Mexico and Canada, though these were temporarily suspended. Concurrently, he enforced a 10% increase on tariffs for Chinese goods. Most significantly, a 25% tariff on steel and aluminum imports was ordered, affecting major suppliers like Brazil, Canada, South Korea, and the EU. The German economy, heavily reliant on exports, faces potential challenges. Although the immediate impact of the steel and aluminum tariffs might be limited, the broader implications could be severe, especially for the automotive sector. German manufacturers exported around 336,000 vehicles from Mexico to the US last year, underscoring the complex, cross-border supply chains at risk. Globally, countries are exploring responses. The EU is preparing counter-tariffs and is critical of Trump's proposed reciprocal tariffs, fearing a broader trade conflict. Nations like India and Taiwan are offering concessions to avoid further tariffs, while others contemplate strategic partnerships to counter US protectionism. The German Bundesbank warns of significant economic repercussions if the trade dispute escalates, potentially reducing economic growth and exacerbating inflation. This scenario presents a considerable threat to the German labor market, where a decline in demand for skilled workers is already evident due to economic uncertainties. Amidst these tensions, the EU and South American countries are considering closer cooperation, potentially through agreements like Mercosur, to mitigate the impact of US tariffs. As the situation develops, the global trade landscape remains fraught with uncertainty, with significant implications for international economic stability.

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19. Februar 2025 um 05:11

Counterattack against 'Tech Oligarchs' Musk: Habeck goes on the offensive - and promotes European X

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Habeck calls for more digital autonomy of the EU in order to end dependence on 'tech oligarchs' like Elon Musk, who poses a threat to European values. He criticizes their 'hypocritical notion of free speech' and lack of regulation. Habeck advocates for a European communication platform in order not to be dependent on Chinese algorithms or right-wing extremist ideas. Green MEP Lagodinsky proposes to take over existing platforms like TikTok to achieve digital sovereignty. Habeck warns that measu..
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19. Februar 2025 um 12:01

Robert Habeck News: Habeck: Prevent Tariff Spiral

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Federal Minister of Economics Habeck warns of a "tariff spiral" with the USA; the EU is prepared to respond to tariffs; Trump threatens with car tariffs that could hit the German automotive industry.
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19. Februar 2025 um 11:37

US Tariffs Would Burden Pharmaceutical Industry in the Southwest

Politics
Economy
The threat of US tariffs on pharmaceutical products is unsettling the industry in Baden-Württemberg. Local companies generated 7 billion euros in sales in the USA; according to the Ifo Institute, tariffs of 25% could mean sales declines of 30%. Implementation would also result in supply bottlenecks in the USA, as original preparations are predominantly manufactured in Germany.
CW

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