8: India

GOP Suffers Double Blow in Special Elections
The EU’s Trade Truce With the U.S. Is in Danger of Unraveling When President Trump unveiled his trade deal with the European Union in July, businesses across the bloc thought it would end months of uncertainty for one of the world’s most lucrative trade relationships......... Less than two months on, frustration with the deal is growing in Europe. Businesses are halting exports to the U.S., complaining about new bureaucratic hurdles and warning about a new era of unpredictability. ......... The reason: the Trump administration’s decision to expand its 50% metals tariffs to cover hundreds of additional products that contain steel and aluminum, slapping a large number of European manufacturers with tariffs higher than the 15% Trump and the EU agreed on for most products........ While the U.S. steel and aluminum tariffs initially targeted only the metals themselves and mostly metal parts, such as screws, they now apply to such objects as motors, pumps, machine tools and construction equipment. ....... “About 30% of U.S. machinery imports from the EU are now subject to 50% tariffs on the metal content of the product,” Bertram Kawlath, president of the German Mechanical Engineering Industry Association, or VDMA, wrote in a letter to European Commission President Ursula von der Leyen at the end of August.

The sector, he added, is facing an “existential crisis.”

.......... The grudging acceptance that greeted the July deal is now threatening to unravel. Discontent is spreading not just among politicians within EU member states but also to the European Parliament, whose approval is required for key parts of the deal to take effect. ......... “There is no security and predictability” in the U.S.-EU deal, said Bernd Lange, a German politician who leads the parliament’s trade committee. Lange said he now expects lawmakers to demand changes to draft legislation that would eliminate or reduce tariffs for a range of U.S. imports under the July agreement. ......... Why should the EU “give zero tariffs for U.S. motorbikes, knowing that now European producers have to pay not only 15% but also the steel and aluminum tariffs?” Lange said. ........ U.S. companies are affected, too. John Deere, one of Krone’s largest competitors, has plants in Mannheim and Zweibrücken in Germany. About 20% of its German production is exported to the U.S., according to a company spokeswoman. .......... “We are relying on structural cost discipline and close cooperation with our distribution partners to cushion the impact” of the steel tariffs, the spokeswoman said.

“We aren’t planning to relocate our production from Germany to the U.S.”

........... The effective tariff facing exporters now varies depending on a product’s metal content. For a machine worth $1 million with a 20% steel content, the rate would be 50% of $200,000 and 15% of the rest, resulting in a $220,000 levy per machine—or a 22% tariff. The U.S. has said it would review the metals tariff list every four months, adding to the uncertainty. ...........