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German Manufacturers Unconcerned At US Border Taxes

Friday, March 17, 2017

Most German manufacturers exporting to the United States will not shift production to the US as a result of the imposition of new border taxes, according to a survey by the Ifo Institute.

The survey of 2,700 companies showed that while there is a degree of anxiety about US proposals for border taxes, which are designed to reduce the level of imports and boost domestic production, three-quarters of the respondents expect that such taxes, if imposed, would have no impact on their sales.

Gabriel Felbermayr, Head of the Ifo Center for International Economics, said that German companies "do not seem to be over-concerned" about the prospect of higher tariffs or taxes on trade with the US.

"Only 18 percent expect a drop in sales, but six percent expect an increase and 76 percent foresee no change," he added.

Nevertheless, a substantial percentage of those surveyed still anticipate that the US will increase barriers to trade, with 45 percent expecting new customs duties, and 36 percent predicting increases in existing trade barriers.

Of the 46 percent of companies which export to the US, 21 percent said they are likely to shift more production to the US as a result of President Trump's trade policies. Only seven percent of companies with current operations in the US plan to establish more subsidiaries there. In total, 28 percent of German manufacturers active in the US will increase their value added in the country, the survey revealed.