German machine builders are extremely puzzled by the latest tariff change by the US government, according to the German Association of the Engineering Industry VDMA.
"The previously reached agreement between the United States and Europe on 15% duties is unlikely to be more expensive than it was envisaged if the United States continues to raise tariffs on steel and aluminum," says managing director Tilo Brodtmann.
Last week, the U.
S. Department of Commerce added 407 items to the list of steel and aluminum derivatives that will be subject to a 50% duty. rate. The idea of derivatives "can go very far," a VDMA representative explains to Callanish. The list of 407 items covers 165 products from typical engineering firms, "such as agricultural or construction machinery," he adds.
"Our companies will have to inform the US customs about the content of various types of steel in their equipment and their cost," he notes. Although this in itself requires significant additional effort and paperwork for the companies involved, the demands of commerce are taking the game one step further, as authorities are now requesting information on the origin of cast steel semi-finished products from which machine parts are made.
"Our companies hardly know the price of steel or its origin," says the spokesman. If the origin of the goods is not indicated, the US customs will automatically apply the maximum tariff for Russia, which is 200%. "Our companies are desperate because of the looming red tape," he adds.
He also points to the fact that the list is updated every four months, "so we don't have long-term reliability." He rejects hopes that the updates could also mean a reduction in the number of positions: "The US government does not seek to make exceptions," he concludes.
Christian Kel Germany
Kallanish.com
