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U.S.-China trade deal will hurt Germany, says world economic institute

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Kiel Institute for the World Economy (IfW), said on Monday that an interim deal recently agreed by the U.S. and China to stave off their trade war would hit Germany hard.


“As a result of trade diversion, Germany’s exports of goods to China are likely to fall by almost 4.5 billion dollars in 2020, especially in industries such as vehicles, aircraft and industrial machinery.

“Only Brazil’s soybean farmers will be hit harder, estimating that their exports to China will decline by 5 billion dollars due to the trade deal,” the institute said.

According to IfW president, Gabriel Felbermayr, as part of the agreement, China is committing itself to import U.S. goods worth around 200 billion dollars and will forgo products from other countries.

“On the other hand, it brings disadvantages for China’s other trading partners, whose imports are now being displaced by U.S. products and who are losing market share in China to a considerable extent,” Felbermayr said.

The IfW expects German manufacturing to be most adversely affected, the sector is expected to export 4.3 billion dollars less of goods to China in 2021, compared to a scenario without trade war and without the interim deal.

Felbermayr, however, argued that the agreement was questionable in several ways.

“The U.S. benefits unilaterally, while China and third countries are losing.

“It clearly violates WTO rules and leaves many questions unanswered, such as what happens if China does not fulfill its import obligations.

“The interim agreement, known as the `phase one’ trade deal, has seen both countries roll back tariffs in a bid to pause their two-year-old trade war,” Felbermayr said.

Edited By: Yahaya Isah/Emmanuel Yashim



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Hadiza Mohammed: is a graduate and a professionally trained journalist, with experience in national news reporting/editing and verification at the News Agency of Nigeria. NNN is a Nigerian online news portal that publishes breaking news in Nigeria, and across the world. Our journalists are honest, fair, accurate, thorough and courageous in gathering, reporting and interpreting news in the best interest of the public, because truth is the cornerstone of journalism and they strive diligently to ascertain the truth in every news report. Contact: editor[at]nnn.com.ng

Contact US: editor @nnn.com.ng, nnnnews247 @gmail.com

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