Cyprus Mail
Europe

German businesses suffering as US sanctions and tariffs bite

German Foreign Minister Heiko Maas said Germany, France and Britain were determined to protect European companies engaged in business with Iran

German companies are increasingly suffering from US President Donald Trump’s policy of sanctions – including those against Iran – and the tariffs he is pursuing in an escalating trade war with China, business associations said on Thursday.

Washington said on Wednesday it would also impose fresh sanctions on Russia by the end of August after it determined that Moscow had used a nerve agent against a former Russian agent and his daughter in Britain, something the Kremlin denies.

“Of course the US policies are impacting German foreign trade,” Holger Bingmann, head of the BGA trade association, told Reuters. “Individual companies are grinding their teeth and are severely affected.”

Volker Treier, foreign trade chief at the DIHK Chambers of Commerce, said the international environment was becoming increasingly complex for German businesses.

Treier said many of Germany’s trading partners were affected by the US measures and their effects, which was in turn hurting business with German companies. Exports were not faring as well as last year, he added.

He said DIHK’s forecast that German exports would increase by 5 per cent this year “seems increasingly ambitious”.

Bingmann and Treier were reacting to the new US sanctions against Russia but also to punitive measures against Iran and reciprocal tariffs and trade threats by the US and China.

The United States will impose tariffs on another $16bn of imports from Aug. 23 and China plans to slap additional tariffs of 25 per cent on the same amount of US imports ranging from fuel and steel products to autos and medical equipment.

On Wednesday China and Germany defended their business ties with Iran in the face of Trump’s warning that any companies trading with the Islamic Republic would be barred from the United States.

“It’s simply unacceptable that US laws are being enforced outside US territory,” Bingmann said.

He urged the German government to provide details on how it would protect German firms after the latest US sanctions against Iran, adding that if Berlin did not do that, German firms would gradually cease doing business there.

On Monday German Foreign Minister Heiko Maas said Germany, France and Britain were determined to protect European companies engaged in business with Iran using an updated version of the EU’s so-called Blocking Statute, which bans any EU company from complying with US sanctions.

Bingmann said German trade with customers in other countries was doing well overall but that was largely due to good business in the EU.