Trump announced a wave of increasingly higher tariffs against European allies, which would remain in force until the United States obtains consent to purchase the strategically located island. These threats appeared a few days before the planned vote of the European Parliament on reducing customs duties in trade relations with the USA.
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German industry about Greenland and Trump. “This will only encourage more demands.”
The head of the German Machinery and Equipment Manufacturers Association (VDMA), Bertram Kawlath, warned that concessions to the White House could have far-reaching consequences.
— If the EU gives in on this issue, it will only encourage the President of the United States to make another absurd demand and threaten to impose further tariffs. – he said.
Volker Treier, an expert on foreign trade at the German Chamber of Industry and Commerce (DIHK), assesses the matter similarly.
“Highly controversial political goals are unacceptably linked to economic sanctions“- he said, criticizing the combination of political disputes with economic pressure.
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Exporters expect a joint EU response
Both VDMA and DIHK emphasize the need for a unified response from the European Union. Among the possible tools, they point to the EU's Anti-Coercion Instrument mechanism, which enables retaliation against third countries that use economic pressure to force political changes in EU countries.
Trump's announcements could also threaten preliminary trade agreements the United States reached last year with the European Union and Great Britain – also subject to planned tariffs related to Greenland.
Voting in the European Parliament is in doubt
Representatives of German industry they do not believe that it is possible to quickly adopt a trade agreement with the US in the current conditions.
“The European Parliament cannot decide on tariff cuts for the United States next week as long as Washington puts pressure on the European Union by imposing new punitive tariffs,” Kawlath said.
The planned vote in the European Parliament concerned primarily the abolition of many EU customs duties on goods imported from the United States.
The consequences are bearable, but there is one key rule
A more moderate assessment of the economic effects was presented by the president of the IfW Economic Research Institute, Moritz Schularik. In his opinion, possible the consequences of Greenland tariffs would be manageable for Germany.
“Only about 10 percent our foreign trade is with the United States. It is important that the EU does not allow itself to be blackmailed, but remains united and stands up to it” – he said in an interview with Reuters.
Experts emphasize that not only the economic scale of the dispute is crucial, but also the political precedent that yielding to commercial pressure in such a sensitive matter could create.
