Politics affects US companies
What are the economic consequences of the US election?
Business as usual or U-turn? What are the consequences of the results of the US elections for German-American economic relations? This question was the focus of the meeting of the Foreign Trade Committee of the Chamber of Commerce and Industry (IHK) Middle Lower Rhine two days after the winner was announced. “The transatlantic relationship is very important to our region,” said Peer Kesper, chairman of the committee, at the beginning of the virtual committee meeting. “For 30 percent of our export-oriented industrial companies, North America is an important export destination, and almost every fourth industrial company with foreign investments names the USA as an important target region.” At the same time, almost 150 US companies have branches in the Middle Lower Rhine. "I hope that the election winner will unite the country and not divide it, strengthen multilateralism and transatlantic friendship and stand up for free trade and against protectionism," emphasized Kesper.
Afterwards, Jürgen Matthes, Head of the International Economic System and Business Cycle at the Institute of German Economics (IW) in Cologne, first gave an overview of the current economic situation in the USA: “The Trump administration has accepted a higher national debt and a lower one Taxes and deregulation set. That led to decent growth, unemployment was low and the income trend was good. ”The Corona crisis had ruined many successes and exposed weaknesses - for example in the health system.
Trump's protectionist trade policy of the past few years has hardly influenced the trade deficit in the United States, according to the IW expert. The consequences of Trump's tariffs for Europe were "manageable". “This is mainly due to the fact that only a small part of EU exports were affected by tariffs. The fact that the EU threatened and implemented retaliatory measures contributed to the fact that there were no more tariffs. "
Matthes expects less confrontation and more cooperation from the Biden government in the future: “He will focus more on international solutions and less on national solo efforts.” However, the Democrats are traditionally critical of trade. “The slogan, Buy american‘ was part of Biden's election campaign, ”Matthes recalled. "A new attempt at a comprehensive transatlantic free trade agreement is not to be expected, instead there could be penal taxes for companies that relocate their production from the USA to other countries, and tax breaks for investments in the United States."
Dietmar Rieg, President & CEO of the German American Chamber of Commerce, attended the committee meeting from New York and described his impressions as an on-site observer in the USA: “Biden will not be able to implement his policy one-to-one because he will probably not be able to implement one Majority in Congress. There will be many compromises and we will not see any major economic policy throws. ”But, stressed Rieg, there will be a new tone and a new rhetoric. “The atmosphere will be cooperative and constructive.” International organizations such as the WTO (World Trade Organization) would probably be strengthened again. Biden has already announced that he would like to rejoin the Paris Climate Agreement as soon as possible.
"In trade policy, China is the dominant issue for Americans," said Rieg. The opinion that Beijing is not playing fair when it comes to technology transfer and subsidies is widespread. The two experts agreed that future transatlantic relations will depend on how the European Union and Germany position themselves on the China issue. "The Americans expect their European partners to join forces in this conflict," said Matthes.
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