German machinery builders are hugely confused over the latest amendment of tariffs by the US government, says German mechanical engineering industry association VDMA.
“The earlier agreement between the USA and Europe on 15% duties is hardly worth more than the paper it has been written on, if the USA keeps widening its tariffs on steel and aluminium,” says managing director Thilo Brodtmann.
Last week, the US Department of Commerce added 407 items to the list of derivative products with steel and aluminium portions, which will be charged a 50% tariff. The idea of derivative “can go very far downstream,” a VDMA spokesman explains to Kallanish. The list of 407 items covers 165 products from typical mechanical engineering firms, “like agricultural or construction machinery”, he adds.
“Our companies would need to report the content of different kinds of steels in their machinery – and their value – to US Customs,” he notes. While this in itself creates significant extra effort and paperwork for the companies involved, Commerce’s requirements take the game even one step further, with authorities now asking for the origin of the cast semi-finished steel from which machinery parts are fabricated.
“Our companies would hardly know the value of the steel, or its origin,” the spokesman says. If no origin can be given, US Customs will automatically apply the maximum tariff for Russia, which is 200%. “Our companies are despairing over the looming bureaucratic effort”, which is nearly impossible to meet, he adds.
He also points to the fact the list is updated every four months, “so we have no long-term reliability”. He dismisses hopes that the updates could also mean a reduction in the number of items: “The US government is not keen on making exemptions,” he concludes.
Christian Koehl Germany
