Will New EU-US Trade Deal Lower Prices for German Consumers?

The recent trade agreement between the EU and the USA introduces significant changes with potential benefits and drawbacks for consumers and industries in Germany. By removing tariffs on US industrial goods, the deal could lead to lower prices for American products in Germany, benefiting car buyers with reduced costs on vehicles from manufacturers like Mercedes and BMW. However, there is skepticism from industry experts, such as the Federal Association of Wholesale, Foreign Trade, and Services, regarding whether these price reductions will be passed on to consumers.

On the downside, the German economy might face challenges due to the agreement. The industrial sector could experience a drop in value creation by about 1.5%, and the GDP might shrink by 0.2%. This is partly due to potential declines in exports to the USA by up to 16%. The automotive and pharmaceutical industries are expected to encounter increased burdens due to imposed US tariffs.

While the deal is lauded as a significant trade achievement, its reception remains mixed, with concerns about its comprehensive impact on the German economy. Adjustments in business strategies and supply chains might be necessary to mitigate adverse effects.