German firms operating in the US and China have been hit massively by the ongoing US-China trade conflict, as tensions escalate between Washington and Beijing.
Trade tariffs have severely disrupted German businesses based in China, with 41 percent based there saying they were affected when exporting goods to the US, while 46 percent
reported higher costs when importing from the US.
In addition, 57 percent of US-based German companies reported higher costs when importing and exporting within China.
Volker Treier, foreign trade chief at the DIHK, said: “The dangerous trade dispute between the U.S. and China is also hitting German companies doing business in the two countries.
“The impact is huge: nearly half of the imports from German companies are directly or indirectly affected by the new tariffs, for example because they source raw materials or components from the other country.”
German companies are now considering closing or relocating their production sites to other countries, in a bid to avoid higher costs due to raising tariffs.
Firms based in Berlin were also hit by trade tariffs, due to their international network of suppliers and overseas customer relationships, according to the DIHK survey.
Mr Treier added: “A further escalation of the dispute would be a threat to world trade as a whole.”
Tensions between the US and China continue to escalate, after Beijing threatened to hit back if Mr Trump’s administration raised imposed tariffs to 25 percent on US$200 billion worth of Chinese goods.
The US has already placed tariffs on Chinese goods worth $34 billion to punish Beijing for what it claims is unfair trade practises, while China lashed out with tit-for-tat tariffs.
US Trade Representative Robert Lighthizer said: “The increase in the possible rate of the additional duty is intended to provide the administration with additional options to encourage China to change its harmful policies and behaviour and adopt policies that will lead to fairer markets and prosperity for all of our citizens.”
China’s Foreign Ministry spokesperson Geng Shuang said China was standing firm on its course of action over the US-China trade conflict.
He said: “China’s position is firm and clear cut.
“It remains unchanged. The blackmailing and pressure by the US will never work on China if the US take measures to further escalate the situation we will surely take countermeasures to firmly uphold our legitimate rights and interests.”