Daily Briefing

Eye for an eye, steel levy for steel levy

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Sparks are flying. Source: Mauritius images

Try saying “zusatzzollsatz.”

In addition to Jack Daniels and motorbikes, add steel, as Europe responds to US tariffs with its own levies. The EU wants seeks to protect its markets by lifting the price, so steel that can’t be sold in the US doesn’t flood the markets. For now the move is temporary (for 200 days), but it could be made permanent.

The bloc’s move helps nobody. It’s not based on industry figures – Trump’s tariffs on aluminum and steel have yet to lead to a spike in volumes, according to the Ifo Institute. Raising prices just hurts carmakers and construction firms which depend on imports, and, ultimately, consumers.

Further, the new tariffs weaken efforts by the World Trade Organization and by countries aligning against Mr. Trump. And they strengthen the idea that countries should match levy for levy. Where will this end? I hope we aren’t heading for what to all intents and purposes would be a nationalization of steel as countries rush to protect their own interests. I’m steeling myself for more trade tussles to come.

And if ever there was a time to pull together, it’s now. But Europeans are busy puzzling over Donald Trump’s bruising tour of Europe. Aside from Helsinki, they’re mulling his criticism of Germany’s shipping gas from Russia and his condemnation of NATO members for not spending more. Depending on the way they vote, people in the US are divided on how they see Germany. Berlin, a security laggard, had better shape up for the potential of conflict without Washington’s protection, says one contributor to our paper.

Division is in, it seems. Continental, the second-biggest maker of auto parts in the world, is splitting up. It’s a step towards the car industry’s transformation for a future of self-driving vehicles, and is meant to make the company more agile. The move creates three  divisions: “Powertrain” for motors; “Continental Rubber,” for tires; and “Automotive,” for parts, and is just in time. Daimler, BMW and VW are all busy realigning and decentralizing in time for the traditional motor’s demise. Conti is also mulling its own battery factory. Can German carmakers, who built their fame in the world of diesel, compete in this electric future? Conti’s move comes not a moment too soon.

Given Germany’s chronic shortage of skilled labor, the industry will need all the expertise it can get. Thankfully, the country is attracting more and more foreign students. That trend’s got to be good news for business leaders. But the converse isn’t happening; comparatively few Germans are heading off to study abroad. Berlin wants 50 percent of students to study in other countries but is still miles from that goal. I was lucky: Studying in the US really opened my mind in ways that were wholly unexpected. I was all the more enriched by the experience. So go for it, people!

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