The estimates of the Kiel Global Economy Institute (IFW Keel) indicated that the American customs duties to be imposed on steel and aluminum imports will negatively affect the American economy more than their impact on the economy of the European Union countries.
The institute, located in the city of Kiel in northern Germany, also stated that these fees will lead in the short term to a decrease in the real GDP of the European Union by a small rate of only 0.02%, and attributed this to the fact that steel and aluminum products that will be affected by these customs constitute only about 5% of the total European exports, including only a small part designated for the United States.
As for the United States itself, economic damage will be significantly greater, according to the institute. Prices are expected to increase there by 0.41%, which will increase the inflation rate. Exports are also expected to decrease by 1.37%.
The institute added that due to the high costs of importing steel and aluminum, production costs will increase for many American industrial companies. The institute said that customers will face a rise in prices, which will negatively affect the competitiveness of these companies in foreign markets.
“These customs duties may seem like a symbolic protectionist in the framework of (America First) policy, but in the end it will harm the economic interests of the United States,” explained by his customs duties.
Hintes said that even if the direct effects of this customs policy followed by US President Donald Trump are not a large weight, the European Union should be ready for the possibility of escalating the situation.
In February, Trump approved 25% customs duties on steel and aluminum imports, stressing that these fees will be applied without exception to all countries. It is expected that these measures will enter into force tomorrow, Wednesday.
